The South American country set off a diplomatic firestorm last week by granting asylum to the 41-year-old Australian, who is wanted in Sweden for questioning over allegations of rape and molestation.

Britain has refused to grant him safe passage out of the country.

Assange claims Sweden plans to hand him over to the United States, where he fears prosecution over WikiLeaks's release of a vast cache of of confidential US government files

Speaking to reporters, President Rafael Correa said Britain must "withdraw the grave error it committed by threatening Ecuador to possibly raid its diplomatic mission to arrest Mr Julian Assange."

However, "despite this impertinence, this rude and unacceptable threat, we remain open to dialogue," he added.

Britain has angered Ecuador by suggesting it could invoke the Diplomatic and Consular Premises Act of 1987, which it says allows it to revoke the diplomatic immunity of an embassy on British soil and go in to arrest Assange.

Assange took refuge in the embassy on June 19 to evade extradition to Sweden.

On Monday, Correa had said in an interview with public television that the South American country had always been open to dialogue with the governments of both Britain and Sweden.

He added, however, that both were maintaining an "intransigent" position.

Washington, meanwhile, has said it has had nothing to do with efforts by Britain to extradite Assange to Sweden, and Tuesday denied Assange's "wild assertions" it had launched a witch-hunt for him.