By Santiago Piedra - QUITO

Ecuador will announce Thursday whether it will grant political asylum to WikiLeaks founder Julian Assange, a decision that could spiral into a diplomatic spat and territorial tussle with Britain.

Assange, an Australian national and former computer hacker, came to global attention after his website published a trove of secret documents that hugely embarrassed several governments, most notably the United States, in 2010.

But it is for his personal actions -- he is wanted for questioning over sexual assault allegations in Sweden -- that he is currently being pursued, and he has been holed up in Ecuador's London embassy since June.

Ecuador on Wednesday hit out at Britain for threatening to storm its London mission to arrest Assange, while WikiLeaks said such action would be "a hostile and extreme act, which is not proportionate to the circumstances."

Assange, 41, says he fears eventual deportation from Sweden to the United States, which would seek to try him for his website's release of thousands of diplomatic cables and logs relating to the wars in Iraq and Afghanistan.

Those disclosures were the biggest intelligence leak in US history, but in London the focus is on Britain's right to remove Assange from the embassy, should they wish to do so, and the diplomatic furor that could ensue.

Ecuador's Foreign Minister Ricardo Patino said it would be "unacceptable" for British police to enter the embassy, but noted that his country "has made a decision" on Assange and will announce it Thursday at 7:00 am (1200 GMT).

Patino said Wednesday that Ecuador had received "an express threat in writing" from Britain "that they could storm our embassy if Ecuador does not hand over Julian Assange."

"Ecuador rejects in the strongest terms the explicit threat made in Britain's official communication," Patino told reporters.

"The position taken by the government of Great Britain is unacceptable, both from the political and the legal point of view," he said, warning that entering the embassy without authorization "would be a flagrant violation of the Vienna Convention" on diplomatic relations.

Assange took refuge at the embassy on June 19 to avoid extradition to Sweden, which he claims plans to eventually surrender him to US authorities.

But even if the asylum request is granted, it is unclear whether Assange will be allowed to leave, as British police were waiting outside the embassy ready to arrest him for breaching the terms of his bail granted in 2010.

"The UK has a legal obligation to extradite Mr Assange to Sweden to face questioning over allegations of sexual offenses and we remain determined to fulfill this obligation," a British Foreign Office spokesman said.

Assange had embarked on a marathon round of court battles, but finally exhausted all his options under British law in June when the Supreme Court overturned his appeal against extradition.

Ecuador had said it was reviewing the sexual misconduct allegations as it weighed his asylum request. Assange maintains he had consensual sex with the alleged Swedish victims.

WikiLeaks infuriated Washington when it released a flood of secret war reports from Iraq and Afghanistan and of US embassy cables containing unguarded remarks by world leaders and diplomats.

The group's website charged in a statement Thursday that the placing of British police outside the Ecuadoran embassy amounted to "a menacing show of force," designed "to bully Ecuador into a decision that is agreeable to the United Kingdom and its allies."

Ecuadoran President Rafael Correa has said that the mere possibility that Assange could face capital punishment in the United States could be reason enough for his government to grant the activist's asylum petition.

The leftist Correa has often been at odds with Washington and has expressed support for Assange, offering him asylum in 2010 before later backing off.

Assange's mother and the Spanish former judge Baltasar Garzon, who is helping to represent him, recently travelled to Ecuador to argue on his behalf.

Offering shelter to a high-profile figure like Assange -- hailed as a whistleblower by his supporters -- could help Correa push back against critics who accuse him of clamping down on press freedom.

Britain's Foreign Office said it hoped a "mutually acceptable" solution could still be found, but warned it would do all it could to extradite Assange to Sweden.

It is threatening to 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.