TEHRAN: Between 100 and 300 Iranian protesters have entered a second British diplomatic compound in Tehran, after an incursion into the main British embassy in the centre of the capital, Iranian media reported.

The second compound, in the north of the city, hosts residences for British diplomats and French, German and British schools.

The state news agency IRNA said the protesters had foreigners there in their control – that they were described as "protecting."

Iranian protesters stormed the British embassy in Tehran on Tuesday, removing the mission's flag and ransacking offices before police went in after them, an AFP journalist outside the compound reported.

The British government said it was "outraged" by the incident which it called "utterly unacceptable and we condemn it."

Protesters were shown live on Iranian state television throwing stones at embassy windows, breaking them, and one was seen climbing the wall with a looted portrait of Britain's Queen Elizabeth II.

Others threw embassy papers into the air.

The incursion was part of a bigger demonstration called to express anger at new British sanctions against Iran's financial sector imposed over Tehran's controversial nuclear programme.

Police, who had initially stood by as around 20 protesters clambered the walls, entered the compound and, after more than half an hour, managed to remove most of them.

Outside the embassy's walls, several hundred other demonstrators who had been chanting "Death to Britain" were being dispersed by other officers.

Attempts by AFP to contact several embassy staff members by telephone and email were not immediately successful.

An embassy spokesman told AFP before the protest that Britain expected Iranian authorities to "ensure that British Embassy staff and premises in Iran are adequately protected."

In London, a Foreign Office spokesman urged Tehran to "act urgently to bring the situation under control," citing its duty under international law to protect diplomats and embassies.

The demonstration came a day after Iran passed a law to expel British ambassador within the next two weeks in retaliation for new British sanctions that cut off all ties with Iran's financial sector.

The sanctions were part of a coordinated raft of unilateral measures announced on November 14 by Britain, the United States and Canada to further pressure Iran to halt its programme of uranium enrichment.

Britain has threatened to act "robustly" if Iran's foreign ministry follows through by kicking out its ambassador, Dominick Chilcott, who took up his post only last month.

The European Union and the United States said on Monday they are considering applying extra sanctions on Iran, based on fears the Islamic republic is seeking an atomic bomb.

An EU foreign ministers' meeting on Thursday was expected to unveil additional measures, diplomats said.

Washington does not have an embassy in Tehran, having closed it after militant Islamic students broke into it in 1979, taking 52 diplomats hostage for 444 days.

Iran has repeatedly denied its nuclear programme has any military dimension to it, and has dismissed as baseless a report this month by the UN nuclear watchdog strongly suggesting the contrary.

Iran is already subject to four sets of UN sanctions designed to pressure it to halt its uranium enrichment activities, as well as the unilateral Western sanctions.

Russia and China have slammed the latest Western sanctions, calling them illegal and a barrier to resuming stalled negotiations with Iran over its nuclear program.