The Iraqi government has ordered the Swedish ambassador in Baghdad to leave as a diplomatic dispute over the recent burning of a Quran in Stockholm intensifies.

Baghdad has also recalled its charge d’affaires in Sweden and suspended business with Swedish companies.

Protesters in the Iraqi capital stormed the Swedish embassy for a second time on Thursday and torched its compound.

Sweden’s foreign minister described the protests as “completely unacceptable”.

Hundreds of people breached the embassy after they heard that an Iraqi Christian refugee had been given permission by Swedish police to burn a Quran in Stockholm for a second time.

In the event Salwan Momika stamped on the book outside the Iraqi embassy but did not set fire to it. Last month he set a copy alight outside Stockholm’s main mosque.

Muslims consider the Quran to be the word of God and view any intentional damage or show of disrespect towards it as deeply offensive.

But the Stockholm protests were allowed to go ahead after the courts overturned a police ban, because of the legal right to freedom of assembly.

The Baghdad protesters, mainly followers of Shia cleric Moqtada al-Sadr, scaled the Swedish embassy’s walls, set fires within its compound and clashed with riot police.

Sweden has said that all of its employees in Baghdad were safe following the unrest.

The Iraqi government strongly condemned the attack on the Swedish embassy and said that 20 people had been taken into custody.

But it had also warned the Swedish government that it would sever diplomatic relations if it allowed Mr Momika’s second Quran burning to go ahead.

Iraqi Prime Minister Mohammad Shia al-Sudani then released a statement on Thursday asking Iraq’s Swedish ambassador to leave the country.

Work permits have been suspended for Swedish businesses such as telecom giant Ericsson, according to Iraq’s state news agency INA.

The prime minister’s office said the moves were in response to what it called Sweden’s repeated permission for the burning of the Quran and Iraqi flag as well as insults to Islamic sanctities.

In a statement, Sweden’s foreign minister Tobias Billstrom condemned the attack on its embassy “in the strongest terms”.

“Iraqi authorities have an unequivocal obligation to protect diplomatic missions and personnel under the Vienna Convention.”

The European Union and the US condemned the attack on the embassy. The US said it was “unacceptable” that Iraqi forces had not protected the Swedish embassy in Iraq.

The Quran row has drawn the attention of many Muslim-majority countries and the Pope, who condemned Mr Momika’s actions.

It has also brought to focus tensions around Sweden’s freedom of speech laws.

Swedish police had initially rejected applications by Mr Momika to burn the Quran, but were over-ruled by the courts.

Earlier this month a man was also given permission to burn the Torah outside the Israeli embassy in Stockholm. The man did not go ahead with his threat, but said he wanted to show that freedom of expression had its limits and they had to be taken into account.