Five bullets smashed through windows in the upper storeys of the British building which overlooks its perimeter fence onto a busy street. The foreign office said nobody was injured.

The incident plunges Iran’s relations with Britain to new lows. On Wednesday morning, Tehran withdrew its ambassador to London for consultations.

Foreign ministry spokesman, Hamid-Reza Asefi, would not say how long Ambassador Murtaza Sarmadi would remain in Tehran and claimed the move was “not a downgrading of relations”.

Sour relations

But a diplomat in London, quoted by Britain’s Guardian newspaper, said Sarmadi had officially returned for consultations, following a hastily arranged meeting with UK Foreign Secretary Jack Straw on Monday.
  
The newspaper’s source believes Sarmadi "may not return" after failing to win any compromise from Straw over last month’s arrest of former Iranian ambassador to Argentina Hadi Sulaymanpour.

The former ambassador was denied bail for the second time last Friday by a British court, even though the Iranian government and his parents had offered a combined guarantee of $1.1 million that he would not flee the country.

Sulaymanpour affair

"We will not accept under any circumstance that the London court hands over Sulaymanpour to Argentina"

Jafar Golbaz
national security spokesman

On Tuesday, Iran’s Deputy Foreign Minister Ali Ahani, who personally flew to London to discuss Sulaymanpour's arrest with Straw, summoned the British ambassador to Tehran, Richard Dalton, and criticized the British judge and prosecution, IRNA reported.
  
The spokesman for parliament's national security and foreign policy committee, Jafar Golbaz, was quoted as saying after a meeting with Ahani: "We will not accept under any circumstance that the London court hands over Sulaymanpour to Argentina."
  
The ex-ambassador was arrested in England on an extradition request from Buenos Aires accusing him of taking part in a bombing of a Jewish centre that killed 85 people almost ten years ago.
  
Iran has called the warrant "null and void", broken off economic and cultural cooperation with Argentina and hinted it might expel British Ambassador, Richard Dalton, over the matter. 

A British court took Sulaymanpour into custody on 29 August - a week after his arrest in Durham, where he was a research student at the town's university.

Diplomatic meltdown

Tehran is also angry that Straw and the British government have been at the forefront of demands for Iran to sign an additional protocol to the nuclear Non-Proliferation Treaty.

The United States and Israel also accuse Iran of secretly developing nuclear weapons, a claim Iran’s government flatly denies.
   
British pressure over the inspections coupled with the detention of Sulaymanpour over the 1994 bombing had led to the diplomatic meltdown.