Britain said on Wednesday it had ordered the immediate closure of Iran's embassy in London and had closed its own embassy in Tehran after it was stormed by protesters.
William Hague's announcement followed attacks on Tuesday in which mobs hauled down British flags and ransacked Britain's offices in Tehran in retaliation for the UK's support of tighter sanctions.
Hague said Britain and its allies would consider other measures in response at a European Union meeting Thursday.
He said it was "fanciful" to believe the attacks did not take place with support from Iran's regime.
The embassy was officially closed on Wednesday following the attacks. However, Britain has stopped short of severing ties with Iran completely.
Hard-line protesters hauled down the Union Jack, set fire to an embassy vehicle and pelted buildings with petrol bombs on Tuesday in what apparently began as a state-approved show of anger over the latest Western sanctions to punish Iran for defiance over its nuclear program.
Iran's parliament approved a bill Sunday to downgrade relations with Britain, one of America's closest allies with diplomatic envoys in the Islamic Republic.Story: Cameron: Iran faces 'serious consequences' for failing to protect British Embassy
The hours-long assault Tuesday on the British Embassy and a residential complex for staff — in chaotic scenes reminiscent of the seizing of the U.S. Embassy in 1979 — could push already frayed diplomatic ties toward the breaking point.
British Prime Minister David Cameron called Tuesday's attack "outrageous and indefensible" and said Iran's failure to defend the embassy and its staff was a disgrace and would have "serious consequences."
Hague's statement, published on the Foreign Office website, said: "It is true that relations between Britain and Iran are difficult, as they are to varying degrees between Iran and many other nations. We publicly differ with Iran over its nuclear programme, and on human rights, and we make no secret of our views.
"But we should be absolutely clear that no difficulty in relations can ever excuse in any way or under any circumstances the failure to protect diplomatic staff and diplomatic premises. "
It was the worst crisis between Britain and Iran since full diplomatic relations were restored in 1999, 10 years after Ayatollah Ruhollah Khomeini's fatwa to kill author Salman Rushdie for his book "The Satanic Verses".
PhotoBlog: Iranian protesters break into British Embassy in Tehran
A Norwegian government official also said it had closed its embassy in Tehran due to security concerns.
Foreign Ministry spokeswoman Hilde Steinfeld said the decision to close the embassy was taken late Tuesday, but that Norway's diplomatic staff have not been evacuated from the country.
Steinfeld would not go into greater detail Wednesday, but said the decision came "after security concerns" and "in context with the attack on the British Embassy."
France said on Wednesday it was recalling its ambassador from Iran for consultations a day after protesters stormed the British embassy in Tehran.
"Given the flagrant and unacceptable violation of the Vienna convention on diplomatic relations and the seriousness of the violence, the French authorities have decided to recall their ambassador from Iran for consultations," French foreign ministry spokesman Bernard Valero said in a statement.
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