Britain sent a letter to the Ecuadorean Embassy aimed at "calming things down," the Foreign and Commonwealth Office said Sunday.
The Friday letter came nine days after Britain threatened to use an obscure 1987 law to revoke the embassy's diplomatic protection and barge into the building to get Assange if Ecuador did not hand him over, Ecuadorean Foreign Affairs Minister Ricardo Patino said.
Ecuador condemned the threat at the time as a "complete intimidation."
"We are not a British colony," Patino told reporters Aug. 15.
Britain said it never made any threats, the BBC reported Sunday.
Ecuadorean President Rafael Correa responded to the Foreign Office letter, saying, "We consider this unfortunate incident over, after a grave diplomatic error by the British in which they said they would enter our embassy."
Correa told the British newspaper The Sunday Times Prime Minister David Cameron "must be very angry" at British Foreign Secretary William Hague "because, besides the rudeness and the discourtesy -- the intolerable threat this was -- it was a huge diplomatic blunder."
Patino told al-Jazeera Ecuador granted Assange political asylum because Ecuador believes in freedom.
"Julian Assange asked for Ecuador's protection because he feels threatened, he feels persecuted for his political opinions and for justly exercising freedom of expression," Patino said. "And he's afraid that as a consequence of this persecution he could be condemned in the United States to life in prison or to the death penalty.
"We, in our country, in Ecuador, believe in freedom of expression. In this country we don't accept the death penalty or life in prison," Patino said.
He also said Ecuador likes to "act on principles."
"A lot of people think it's strange that a government could act on principles. But we act on principles," Patino told al-Jazeera.
But Peruvian-Spanish journalist-politician Mario Vargas Llosa, winner of the 2010 Nobel Prize in Literature, wrote in an op-ed piece in the Peruvian newspaper La Republica Sunday that Ecuador, after Cuba and Venezuela, "has committed the worst abuses against the press in Latin America," closing TV stations and newspapers and dragging reporters that dared to expose corruption in his regime to "servile courts."
He added, "Assange is not currently a victim of free speech, but a fugitive using that excuse so he would not have to answer charges against him as an alleged sexual offender."
Assange has argued the extradition to Sweden is a pretext for the Australian to be sent to the United States, where authorities were incensed by WikiLeaks' 2010 release of 391,832 secret U.S. documents on the Iraqi war and 77,000 classified Pentagon documents on the Afghan conflict.
The whistle-blowing Web site also made available about 250,000 confidential diplomatic cables between the U.S. State Department and more than 270 U.S. diplomatic outposts around the world.
Unconfirmed reports cited by The New York Times indicate a secret grand jury hearing in Alexandria, Va., was considering a U.S. Justice Department bid to charge Assange with espionage.
Leaked e-mails from Strategic Forecasting Inc., a global intelligence company commonly known as Stratfor, suggest a sealed indictment is ready to be made public when U.S. officials determine the legal proceedings against Assange in Britain and Sweden have come to a close.
Assange claims Washington may want to execute him for "political crimes" associated with exposing government secrets.
He denies 2010 allegations of sexual molestation, coercion and rape made by two women in Stockholm, where he was promoting his Web site. He is wanted for questioning on one count of unlawful coercion, two of sexual molestation and one of rape.
Swedish prosecutors say they have solid case against Assange, but have not charged him with a crime.
One of the allegations is that Assange had sex without a condom with one of the women while she slept, after having had consensual sex with her earlier.