Decision to grant asylum to WikiLeaks founder goes down well with president's supporters, but critics condemn it as a damaging move

The decision of Rafael Correa, Ecuador's charismatic and often hot-tempered leader, to grant political asylum to Julian Assange has gone down well with his supporters, who see their small country taking the moral high ground. But for his critics, the move is typically provocative and damaging to the country's international standing.

Rosana Alvarado, a national assembly representative of Correa's Alianza Pais party, was at the forefront of 50-strong crowd of protesters who gathered near the office block housing the British embassy in Quito.

Alvarado said Ecuadoreans were people who had learned to survive and assert their sovereignty in an "upright and decent way". She said Ecuador wanted to protect Julian Assange, who had "taken on the big powers, the huge empires and economic interests to defend freedom of speech".

"We don't defend impunity," she added but stressed that Swedish officials turned down the opportunity to interview Assange at the Ecuadorean embassy in London.

"The coincidences are very strange," she said of the allegations of sexual assault faced by Assange in Sweden. "I don't believe it could be an accident that a scandal of this kind surged when he was taking on the big powers for having revealed sensitive information."

It was a small but noisy protest. Chants ranged from "colonialism go home" to stronger expressions such as "England: colonial son of a bitch", which rhymes in Spanish.

"This set-up trial [in Sweden] is just a farce so they can deliver Julian Assange to the United States and apply the death penalty," said Rosario San Roman, a journalist.

Despite his support for Assange's whistleblowing, Correa has had a troubled relationship with the Ecuadorean press. In February, Carlos Pérez, editor of the main opposition newspaper, El Universo, was granted 14 days asylum in Panama's embassy in Quito after the country's high court upheld a conviction of criminal defamation against him and other senior editors following a highly critical editorial column. Correa later pardoned them and waived a $42m damages award.

"There was no safe passage for Pérez when he sought asylum in the Panamanian embassy," said Ramiro Crespo, director of Analytica, a Quito-based thinktank. "There's a contradiction between the way [Correa] has treated Assange and his lack of respect for journalists and the political opposition at home. It would be nice if he didn't insult them and accuse them of corruption every Saturday." President Correa has a weekly programme on the state-owned channel.

Crespo described the asylum move as a "distraction" to draw attention away from Correa's domestic problems including legal security, the centralisation of executive power and freedom of expression. "Right now Ecuador is not a real democratic republic where there is a proper separation of powers."

He added that, in granting asylum to Assange, Correa had reinforced his "anti-Americanism and assertion of Ecuador's sovereignty" which went down well domestically, although it would probably have little impact on his already high popularity. Opinion polls show Correa has a 70% approval rating, largely due to his huge social spending in the poor nation of 14 million people. General elections are set for January 2013 and Correa is expected to win.