Protesters threw petrol bombs and climbed over the gates of the embassy to loot the building.
William Hague said Iran had "committed a grave breach" of the Vienna Convention, which demands protection of diplomats and diplomatic premises under all circumstances.
The Foreign Secretary said that all embassy staff had been accounted for and played down suggestions of a hostage situation, saying there had been "confusing" reports coming out of the country
He revealed that Prime Minister David Cameron had chaired a meeting of the Government's Cobra security committee this afternoon and the Iranian charge d'affaires had been summoned to the Foreign Office.
Mr Hague added: "We hold the Iranian government responsible for its failure to take adequate measures to protect our embassy as it is required to do.
"I spoke to the Iranian Foreign Minister this afternoon to protest in the strongest terms about these events and to demand immediate steps to ensure the safety of our staff in both embassy compounds.
"Clearly there will be other, further, and serious consequences. I will make a statement updating Parliament on this tomorrow," Mr Hague added.
Around 24 embassy staff and their dependants are based at the office and residential compounds in Tehra