Ecuador's government says a microphone found in its London embassy, where the WikiLeaks founder Julian Assange is staying, was hidden inside an electrical outlet in the office of the ambassador.

The foreign minister, Ricardo Patino, told a news conference in Quito the bug was found in mid-June when Ecuadorean technicians reviewed the embassy's wiring.

He named a British company he accused of being responsible for installing it.

"We have reason to believe that the bugging was carried out by The Surveillance Group Limited, one of the largest private investigation and covert surveillance companies in the United Kingdom," he said.

In response, The Surveillance Group, based in Worcester, in the west Midlands, posted a statement on its website denying the allegation.

"We have this morning heard an accusation the source of which is apparently Ricardo Patino, the Ecuadorian foreign minister, suggesting that we have bugged the Ecuadorian embassy. This is completely untrue," it said.

"The Surveillance Group do not and have never been engaged in any activities of this nature. We have not been contacted by any member of the Ecuadorean government and our first notification about this incident was via the press this morning. This is a wholly untrue assertion."

Holding up a picture of the purported bug, Patino said the purpose of the hidden microphone was to listen to the conversations of the ambassador, Ana Alban, in her office. Assange lives and works in a different room in the embassy.

The foreign minister said Ecuador was going to ask for the co-operation of Britain's government in investigating the alleged bugging.

The system worked with a sim card and could be activated by a call from any cellular of fixed-line phone, he said.

Assange was granted asylum by Ecuador last year. He has been living inside the South American country's embassy in London to avoid extradition to Sweden to face allegations by two women of sexual assault, which he denies. Britain will not give him safe passage if he leaves the embassy.