According to Foreign Office sources, Chris Segar, the head of mission, and his staff, including diplomats, security guards and contract workers, were moved under heavy guard to the main coalition compound in Baghdad, protected by thousands of American troops.

“They were moved the day after the UN bombing,” a British official told The Times. “It happened as a result of specific information.”

News of the evacuation of the embassy, a landmark in the heart of Baghdad, added to the growing sense that the coalition is under siege in the capital of the country it is supposed to be running. The fear of further terrorist attacks grew yesterday after American and UN officials said that they suspected Iraqi security guards had helped Tuesday’s attack on the UN headquarters.

At least 24 people were killed, including Sergio Vieira de Mello, the UN special representative, whose body was flown out of Baghdad in a Brazilian aircraft yesterday. It emerged yesterday that also among the victims was Gillian Clark, a 47-year-old British-born child protection worker.

The UN said yesterday that up to half of its staff in Iraq was being withdrawn because of continued security fears. Some 200 UN officials have been removed so far.

The withdrawal of the high-profile British presence from the centre of Baghdad represents a serious blow to the coalition’s credibility.

The embassy, housed in the former Ottoman governor’s residence on the banks of the Tigris, is a well-known feature in the capital. It was with some pride that British paratroopers secured the compound in April and then reopened the mission for business, hosting a Queen’s birthday party reception in June.

The building, which remains under British military guard, has always been regarded as vulnerable to terrorist attack. The main offices back on to residential buildings and a public road running along the Tigris embankment. The grounds are overlooked on several sides by high-rise apartments.

The embassy staff include diplomats, a team of security guards and more than a dozen contractors who are erecting a building on the lawn to serve as temporary offices.

The direct threat against British interests in Baghdad could further exacerbate the problem in Whitehall of finding candidates willing to serve in Baghdad.

“They are desperate for volunteers but few people want to go,” a Whitehall source said.

Times Recommends

• Rebel militias dig in as Russia leaves Georgia
• Lebanon's drug barons reap a bumper harvest
• A chilly wind is blowing down Main Street