Iranian protesters stormed two British Embassy compounds in Tehran on Tuesday, smashing windows, hurling petrol bombs and burning the British flag during a rally to protest against sanctions imposed by Britain, live Iranian television showed.

Initial reports by semi-official Mehr news agency said six people working at the British embassy's compound in northern Tehran had been taken hostage. But the agency withdrew the report from its website minutes later with no explanation.

The semi-official Mehr news agency initially said: 'Students from universities in Tehran took hostage six people working for the British embassy in Qolhak garden,' referring to the leafy compound.
    
The attacks followed the rapid approval by Iran's Guardian Council of a parliamentary bill compelling the government to expel the British ambassador in retaliation for the sanctions, and warnings from a lawmaker that angry Iranians could storm the British embassy as they did to the US mission in 1979.

Several dozen protesters broke away from a crowd of a few hundred protesters outside the main embassy compound in downtown Tehran, scaled the embassy gates and went inside. Iranian security forces appeared to do little to stop them.

The semi-official Mehr news agency said protesters pulled down the British flag, burned it, and put up the Iranian flag.

Inside, the demonstrators threw stones and petrol bombs. One waved a framed picture of Queen Elizabeth, state TV showed. 

The British Foreign Office said it was outraged by the incursion into embassy.  "There has been a incursion by a significant number of demonstrators into our Embassy premises, including vandalism to our property," the Foreign Office said in a statement. "This is a fluid situation and details are still emerging. We are outraged by this. It is utterly unacceptable and we condemn it."

The Iranian government had a duty under international law to protect diplomats and London expected it to bring the situation under control and ensure the safety of the staff, the Foreign Office said.

It was not clear if British diplomats had been caught up in the action, or had been harmed. Embassy staff fled protesters 'by the back door', the Mehr news agency said.

Demonstrators waved flags symbolising martyrdom and held up portraits of Iran's Supreme Leader Ayatollah Ali Khamenei.

A separate group of protesters broke into a second British embassy compound in the north of the city, the IRNA state news agency said, and seized 'classified documents'.     

Riot police later moved in and mounted the embassy gates, helping protesters climb back on the street outside, television pictures showed, and began to slowly clear demonstrators.      

The incident followed Britain's imposition of new sanctions on the Islamic state last week over its nuclear programme.

London banned all British financial institutions from doing business with their Iranian counterparts, including the Central Bank of Iran, as part of a new wave of sanctions by Western countries.

In London, Foreign Secretary William Hague said Britain expected other countries to follow its lead in imposing financial sanctions on Iran and will take 'robust' action if Tehran reduces their diplomatic relations. Hague was speaking in a parliamentary debate as news broke of the incident in Tehran but he made no comment on it. - Reuters