TEHRAN (Reuters) - Britain has evacuated all its diplomatic staff from Iran, Western diplomatic sources told Reuters on Wednesday, a day after protesters stormed and ransacked its embassy and residential compound.

Both properties were severely damaged, with official and personal possessions seized or destroyed, said sources who had spoken to staff at the embassy. One described the damage as "carnage."

Britain said it was outraged by the attacks and warned of "serious consequences."

"In light of yesterday's events, and to ensure their ongoing safety, some staff are leaving Tehran," Britain's foreign office (ministry) said in a statement.

While the official statement referred only to "some staff," two diplomatic sources said that all British staff were leaving.

The two embassy compounds were stormed mid-afternoon on Tuesday during a demonstration in the street outside the main building in downtown Tehran, smashing windows, torching a car and burning the British flag in protest against new sanctions imposed by London.

Protesters broke into the residential compound at Qolhak in north Tehran, a sprawling, wooded property which used to be the embassy's summer quarters.

Iranian media said there were between 100 and 300 protesters in Qolhak and some 50 in the main, downtown compound. The storming lasted for a matter of hours and appeared to be over by mid-evening after local police intervened.

An Iranian report said six British embassy staff had been briefly held by the protesters and then freed by police, something British Foreign Secretary William Hague played down, saying the situation had been "confusing" and he would not have called them "hostages."

Several sources told Reuters that diplomats had had their movements restricted by protesters and one said staff in the main compound had been herded into a room while protesters ransacked the compound.

OLD FOX

Iran's Foreign Ministry said it regretted the attacks and was committed to ensuring the safety of diplomats, and parliament speaker Ali Larijani criticized the U.N. Security Council for condemning the attacks.

"The hasty move in the Security Council in condemning the students' actions was done to cover up previous crimes of America and Britain while the police did all they could to keep the peace," Larijani told parliament in an address broadcast live on state radio.

"This devious action will lead to instability in global security," he said.

Kar Va Kargar daily quoted what it said was a statement issued by the students involved.

"The seizure of the British embassy was done by the revolutionary students and this action was not done on the order of any organization," the statement said. "Each free Iranian ... should know that the seizure of this old embassy is in the interest of Iran."

Most Iranian newspapers splashed photographs of the embassy break-in across their front pages.

"Fox's den seized," ran the headline in conservative daily Vatan-e Emrouz, referring to Britain's nickname "the old fox" which reflects a view widely held in Iran that the former imperial power still wields behind the scenes influence in Iranian affairs.

Several newspapers referred to the storming as akin to a repeat of the 1979 takeover of the U.S. embassy in which 52 Americans hostages were held for 444 days, ending diplomatic ties with Washington that have never been restored.

"Seizure of second spy den by Ruhollah's revolutionary children," ran the main headline in hardliner Ya Lesarat, referring to Ayatollah Ruhollah Khomeini, the late leader of the 1979 Islamic Revolution.