Britain and Ecuador today failed to break the impasse over the asylum issue of Wikileaks founder Julian Assange who is holed up in the South American country's embassy here for an year.

41-year-old Assange has been holed up inside the building since his asylum claim in June last year. He will pass the first anniversary of being holed up in the Ecuadorean embassy this week in an effort to avoid extradition to Sweden where he is under investigation for alleged sex offences.

A meeting between UK foreign secretary William Hague and his Ecuadorian counterpart, Ricardo Patino here failed to break the deadlock over Assange, an Australian national.

While, a British Foreign Office spokesperson said the two ministers agreed to keep channels of communication open, but made no breakthrough.

"Ministers agreed that officials should establish a working group to find a diplomatic solution to the issue of Julian Assange, but no substantive progress was made," he said.

"The Foreign Secretary was clear once again that any resolution would need to be within the laws of the United Kingdom," he added.

Britain has refused to grant the former computer hacker safe passage out of the Ecuadorian embassy.

According to a report in the 'Independent' newspaper, Assange believes that staying at the embassy in London is preferable to facing the US legal system.

Patino told a news conference that the Ecuadorian government was prepared to continue to allow Assange to remain inside the embassy, following the decision last year to grant him political asylum.

He believes the claims are a ruse so he can eventually be sent to the US for trial over the leaking of formerly secret US cables. The authorities have denied this.

Patino made it clear that Assange would not be smuggled out of the embassy, saying he should be allowed to leave and go to Ecuador. He said it was "grossly unjust" that Assange could not leave the embassy without being arrested.