Ecuadorean Foreign Minister Ricardo Patino said that Assange's legal and procedural rights had been violated, and that Ecuador accepted his argument that he faced possible political persecution by the United States, which is angry over his release of secret government files.
"We believe his fears are legitimate," Patino told reporters in Quito, the Ecuadorean capital, Thursday morning.
The much-anticipated decision immediately turned Assange's legal fight into a diplomatic standoff between Ecuador and Britain, which says that it is obliged to turn Assange, 41, over to authorities in Sweden, a fellow member of the European Union.
For Assange himself, the announcement from Quito remains only a symbolic victory for the moment. Britain has refused to grant him safe passage out of the country; rather, police say that Assange is subject to immediate arrest if he sets foot outside the embassy because he breached his bail conditions.
Assange's supporters gathered outside the embassy before the decision was announced. A few protesters were arrested after scuffles with police, Sky News reported.
Ecuador's decision comes amid increasing acrimony between London and Quito over the Assange case. On Wednesday, Patino sharply rebuked the British government for what he described as a threat to raid its embassy to arrest Assange. By convention, embassies are considered sovereign territory of the countries they represent.
Ecuador is not "a British colony," Patino warned.
Assange, who is an Australian citizen, denies allegations that he sexually assaulted two women in Stockholm in August 2010. He has acknowledged having sex with them on separate occasions but disputes their accusations that coercion or force was involved.
He and his supporters insist that the allegations are part of a plot to remove him from Britain and ultimately to ship him to the U.S., which Assange says wants to try –- and possibly execute -– him for orchestrating the leak of thousands of classified State Department and Pentagon documents.
Assange took refuge inside Ecuador's embassy, located in one of London's toniest districts, on June 19, after his legal appeals against being sent to Sweden were virtually exhausted. Earlier that month, Britain's Supreme Court ruled that his extradition could proceed.
The request for political asylum in a third country was a bizarre twist in a saga that has dragged on since Assange was first arrested in December 2010. Although Assange remained "beyond the reach" of police while inside the embassy, Scotland Yard warned that he faced arrest the moment he stepped outside it for violating his bail conditions, which obligated him to abide by a nightly curfew at a
The WikiLeaks founder had previously developed some kind of rapport with Ecuadorean President Rafael Correa. Assange interviewed Correa on a Kremlin-backed television show called "Russia Today," a sympathetic exchange in which the two men traded gibes about American arrogance.
Critics have noted the irony of Assange, a free-speech campaigner, appealing for help from a leader who has been accused of mounting a crackdown on journalists in Ecuador.