UK Foreign Secretary Philip Hammond branded the ruling "ridiculous"
WikiLeaks founder Julian Assange has said a UN panel ruling that his stay in a London embassy amounts to arbitrary detention is "vindication".
Mr Assange has been holed up in the Ecuadorian embassy in London since June 2012 having been granted political asylum.
The UK has maintained it will arrest the 44-year-old should he leave the embassy - and then extradite him to Sweden, where he faces a rape claim.
But the UN Working Group on Arbitrary Detention said he was in effect being unlawfully detained and he should be granted his freedom and the right to claim compensation.
But UK Foreign Secretary Philip Hammond branded the ruling "ridiculous" and said the 44-year-old campaigner is a "fugitive from justice".
Speaking by video link from inside the embassy, Mr Assange called on the UK and Sweden to abide by the panel's decision.
He claimed the ruling was "settled law" and warned the two countries would face diplomatic consequences if they did not withdraw the threat of arrest.
Mr Assange accused Mr Hammond of "insulting the UN" and said: "I found those comments to be beneath the stature that a foreign secretary should express in this situation".
Seong-Phil Hong, who currently heads the UN expert panel, said: "The Working Group on Arbitrary Detention considers that the various forms of deprivation of liberty to which Julian Assange has been subjected constitute a form of arbitrary detention".
"The Working Group maintains that the arbitrary detention of Mr. Assange should be brought to an end, that his physical integrity and freedom of movement be respected, and that he should be entitled to an enforceable right to compensation".
The panel's Ukrainian member Vladimir Tochilovsky disagreed with his colleagues - saying the embassy should not be considered a place of detention as Mr Assange fled bail and chose to stay there to evade arrest.
He said the ruling "raises serious questions as to the scope of the mandate of the Working Group"
The panel's findings are not legally binding, but can be used to put pressure on states in human rights cases.
Christophe Peschoux, a senior official at the Office of the High Commissioner for Human Rights, insisted the decision was "in effect" legally binding because is based on international human rights law.
The British government said it would "formally contest" the UN panel's finding, while Swedish prosecutors have said the ruling would have no impact on their investigation.
A UK Foreign Office spokesman said: "This changes nothing. We completely reject any claim that Julian Assange is a victim of arbitrary detention. The UK has already made clear to the UN that we will formally contest the working group's opinion".
British Human Rights Minister Dominic Raab said he had considered the report carefully but it "had the facts upside down".
The Australian fears Sweden could hand him over to US authorities for prosecution over the disclosure of classified military and diplomatic documents by WikiLeaks in 2010.
The Swedish government repeated its position on Friday that Mr Assange would not risk being sent to the US and there had been no extradition request relating to him.