By Tim Castle
LONDON (Reuters) - Britain said on Sunday it remained committed to reaching a diplomatic solution to the presence of WikiLeaks founder Julian Assange in Ecuador's London embassy, after both countries took steps to defuse a row over his action in taking refuge there.
Assange has been living in the embassy's cramped quarters for more than two months since fleeing there to avoid extradition to Sweden, where he is wanted for questioning over rape and sexual assault allegations.
The Latin American state's leader said on Saturday that Britain had withdrawn a threat to enter the embassy to arrest Assange, to whom Ecuador has granted asylum, and that he now considered the "unfortunate incident" was over.
President Rafael Correa was responding to a British assurance that it was not threatening the embassy and that Britain was committed to the Vienna Convention, which protects the inviolability of diplomatic premises.
"We remain committed to the process of dialogue we have entered into and we want that to resume with the government of Ecuador," a British Foreign Office spokeswoman said.
Britain provoked a furious reaction after telling Ecuador that an obscure British law allowed it, under extreme circumstances, to remove the embassy's diplomatic status, exposing Assange to immediate arrest by police.
Ecuador accused Britain of planning to storm the embassy and demanded it withdraw the threat.
Britain said it had not meant to threaten Ecuador, a plea that fell on deaf ears, prompting it to send Ecuador a formal communication on Thursday confirming that the embassy was safe.
The communication was copied to diplomats at a meeting of the Organization of American States (OAS) in Washington on Friday which discussed the spat.
A British diplomat attending the meeting invited Ecuador to resume "constructive discussions" on Assange, the Foreign Office said. "We believe that our two countries should be able to find a diplomatic solution," the unnamed diplomat added, according to a transcript issued by the Foreign Office.
Britain says it is determined to fulfil a legal obligation to send Assange to Sweden.
Correa responded to the British diplomatic approach by saying in a weekly media address on Saturday: "We consider this unfortunate incident over, after a grave diplomatic error by the British in which they said they would enter our embassy."
The OAS had condemned the British threat, and South American foreign ministers backed Correa's position that Britain's warning was unacceptable and could set a dangerous precedent.
Correa says he shares Assange's fears that if handed over to Sweden, he might be extradited to the United States to face charges over WikiLeaks' 2010 publication of secret U.S. cables.
U.S. and European government sources say the United States has issued no criminal charges against the WikiLeaks founder and has made no attempt to extradite him.
(Reporting by Tim Castle, editing by Tim Pearce)