Foreign Secretary William Hague has announced the expulsion of Iranian diplomats and the "immediate" closure of the Iranian embassy in London after the British embassy in Tehran was stormed by "protestors". However it must be stated that this was after the UK had imposed sanctions after the IAEA report suggesting that Iran is allegedly undergoing the creation of a nuclear weapon.
The British Foreign Secretary had demanded that all Iranian diplomats must leave within 48 hours and stated that relations with Iran have not been any lower than they are currently. He went onto state to MPs in Parliament that "If any country makes it impossible for us to operate on their soil they cannot expect to have a functioning embassy here."
Iran stated that it regretted the incident which took place and described it as "unacceptable behaviour by a small number of protesters". The British have closed the embassy in Tehran undergoing further consultation on this issue. However Britain has not fully closed diplomatic ties with Tehran.
Other organisations and countries condemned the attack which included the EU, US and UN Secruity Council.
The British embassy was apparently ransacked and the private quarters for the British Ambassador to Iran was broken into, things stolen, and the main office set on fire.
In my opinion diplomatic ties should still be held, even though not through an embassy. History has shown that peaceful means can just be as effective in solving issues rather than war or severing all-ties at-all.