Iran has denied that it sponsored the attack on the British embassy  The UK will call for stronger economic sanctions on Iran at a meeting of European Union foreign ministers in Brussels on Thursday after the storming of its embassy in Tehran, Foreign Secretary William Hague said on Thursday.
"I will be advocating an intensification of economic sanctions on Iran, particularly to increase the isolation of the Iranian financial sector," he told BBC radio from Brussels.
Hague ordered the closure of the Iranian embassy in the UK after governmental fury at Tuesday's attack by protesters on Britain's embassy in Tehran.
I stress that the measures I hope we will agree today are related to the Iranian nuclear programme, these are not measures in reaction to what has happened to our embassy," he added.
"Our bigger, long-term concern is the Iranian nuclear programme, the danger that poses to the peace of the Middle East and the wider world ... and it is for that reason that we will agree, I hope, today to intensify European Union sanctions on Iran," Hague said.
EU foreign ministers meet in Brussels later on Thursday to map out Europe's response to a report by the International Atomic Energy Agency (IAEA) in recent weeks that suggested Iran has worked on designing an atom bomb.
Britain hit back after Tuesday's attack on its embassy by demanding Iranian diplomatic staff leave British shores within 48 hours.
"The Iranian Chargé in London is being informed now that we require the immediate closure of the Iranian Embassy in London and that all Iranian diplomatic staff must leave the United Kingdom within the next 48 hours.
If any country makes it impossible for us to operate on their soil they cannot expect to have a functioning Embassy here," saide Hague in a statement.
Hague also accused the Iranian government of involvement in Tuesday’s attack, saying it was “fanciful” to suggest that it could not have stopped the mob.
Britain said on Wednesday it had withdrawn some diplomatic staff from Tehran after protesters stormed and ransacked its embassy in the Iranian capital.
“In light of yesterday’s events, and to ensure their ongoing safety, some staff are leaving Tehran,” the Foreign Office said in a statement.
Protestors consisting of hardline students and Basij militia on tuesday trashed British offices in Tehran and stole documents in attacks that dramatically escalated the West’s standoff with Iran over its nuclear programme.
However, Hague said diplomatic ties would continue with Iran, albeit at a much reduced level.
“This does not amount to the severing of diplomatic relations in their entirety. It is action that reduces our relations with Iran to thelowest level consistent with the maintenance of diplomatic relations,” he said.
Norway indefinitely closed its embassy in Tehran, citing security concerns. Norway currently has five diplomats in the Iranian capital, and they have not left the city, said a Norwegian foreign ministry spokeswoman. "They're still in Tehran," she said.
Sweden reacted to yesterday's events by summoning Iran's ambassador in Stockholm to its foreign ministry.
"Iran has a duty to protect diplomatic premises, and authorities there should have intervened immediately," said a Swedish foreign ministry spokesman, Teo Zetterman.
The Scandinavian countries' reactions follow outspoken condemnation of the attack from the US and France.
US Secretary of State Hillary Clinton said earlier Wednesday the attack on the British diplomatic compounds in Iran was “an affront” to the international community and called on Tehran to protect the mission.
On Tuesday, the British government warned of “serious consequences” for the storming of two of its properties in Tehran.
UK Prime Minster David Cameron, in a statement on Tuesday, said all embassy personnel have been accounted for after the attack, which he called “outrageous and indefensible.”
“The Iranian Government must recognise that there will be serious consequences for failing to protect our staff,” Cameron said
In retaliation, Iran warned on Wednesday that it will take measures against Britain after its decision to close the Islamic republic’s embassy in London, a foreign ministry spokesman said.
“The British government’s asking Iranian diplomats in London to leave this country is a passive and hasty action,” the Iranian foreign ministry spokesman Ramin Mehmanparast said in statements emailed to AFP.
“Obviously the government of the Islamic Republic of Iran will take reciprocal action in this regard and holds the British government responsible for protecting the diplomatic properties and belongings in London,” he added.
“What happened at the British embassy in Tehran was unpredictable. It occured due to the anger of some demonstrators over Britain’s policies regarding the Islamic republic,” Mehmanparast said.
He noted that none of the British diplomats were hurt and said the judiciary was “dealing” with the “violators.”
Iran “is committed to international obligations, and considers unacceptable any aggression towards diplomats and diplomatic properties,” Mehmanparast added.             
However, sources have said that the attack was planned days before.
“It was planned and organised by the students but it was not something that came from the government,” said Mohammad Marandi, an associate professor at Tehran University.
“The students were telling me days before that they were planning to be there in large numbers. They said some students would try (to storm the embassy),” he said. “I don’t think the government is happy with what happened.”
Conservative newspapers trumpeted the embassy seizure.
The daily Vatan-e Emrouz declared “Fox’s den seized” – referring to Britain’s nickname “the old fox” which reflects a widely held view in Iran that the former imperial power still wields great power behind the scenes in Iranian and international affairs.
While Iranian police at first did not stop the protesters storming the embassy gates, they later fired tear-gas to disperse them and freed six Britons held by demonstrators.
Iran’s Foreign Ministry expressed its regret for the “unacceptable behavior of few demonstrators”.
The protesters hit back at the Foreign Ministry and police.
“The Foreign Ministry stance on the university students’ move has surprised us because our expectation from the Foreign Ministry is not to sacrifice the basis and the goals of the nation for diplomatic and political relations,” said a statement by a group calling itself the Islamic community of seven Tehran universities.
“While the protesting students were seeking to answer to the plots and malevolence of this old fox in support of the decision of the revolutionary parliament to expel the ambassador of the British government we witnessed the harsh blow of the police on these students,” said the statement on a state TV website.
“We expected the police to be on the side of the students instead of confronting them.”
UN Secretary General Ban Ki-moon said Wednesday he was “shocked and outraged” at the attack on the British embassy in Tehran and urged Iranian authorities to prevent any repetition.
Ban was speaking at a meeting with British international development minister Andrew Mitchell, according to a statement from Ban’s spokesman.
“The Secretary General said he was shocked and outraged to hear of the incident in Tehran in which demonstrators entered the British embassy, briefly abducted embassy staff and damaged property,” the statement said, according to AFP.
Ban welcomed the Security Council’s swift statement condemning the incident and called on Iranian authorities to investigate the incident and avoid any repetition.
Meanwhile, the speaker of Iran’s parliament criticised the UN Security Council over its condemnation of the storming of the British embassy in Tehran and said the resolution, passed unanimously on Wednesday, put global security at risk.
“The hasty move in the Security Council in condemning the students’ actions was done to cover up previous crimes of America and Britain while the police did all they could to keep the peace,” Ali Larijani told parliament in an address broadcast live on state radio.
“This devious action will lead to instability in global security,” he said.
The Guardian Council, Iran’s highest legislative body, on November 28 endorsed parliament’s move to downgrade diplomatic ties with Britain, including the expulsion of its ambassador, after the UK expanded its sanctions last week.
The US and allies including the UK have said Iran is seeking to develop atomic weapons under the cover of a civilian nuclear programme. President Mahmoud Ahmadinejad said this month that Iran won’t withdraw an iota from its atomic programme and dismissed the United Nations report showing the country continued working on nuclear weapons capability until at least last year.
  Britain last week banned all its financial institutions from any dealings with Iran, including its central bank in lieu of the IAEA report.
 Iran, the world’s fifth biggest oil exporter, denied the charge and said it only wants to generate electricity.
The United States and Canada also tightened their sanctions on Iran last week but France is pressing for more.
“France is advocating sanctions on a scale that would paralyze the regime: freezing of central bank assets and an embargo on hydrocarbon exports,” French Foreign Minister Alain Juppe said in an interview in a weekly news magazine.
Seemingly alluding to efforts to agree such a move at the level of the 27-country European Union, Juppe said: “We want to reach a common position so that the pressure will be utmost. We cannot keep letting the Iranians take us for a ride.”
Germany, France and Sweden summoned the Iranian envoys to their countries on Wednesday to protest against the incursion of the British embassy, while Italy said it was doing likewise and was thinking about closing its Tehran embassy altogether.