Wikileak's Julian Assange under arrest in London

Man behind massive release of secret diplomatic cables faces charges including rape and sexual molestation, alleged to have been committed when he visited Stockholm in August.

Julian Assange, the founder of WikiLeaks, was in a British jail last night after being arrested in London on allegations he sexually assaulted two women in Sweden.

Mr Assange, 39, an Australian, whose organisation is in the midst of publishing a quarter of a million secret US diplomatic cables, surrendered to police yesterday after Scotland Yard received an Interpol arrest warrant on Monday.

A few hours later, he appeared in court in London for a preliminary hearing on extradition to Sweden, where he is facing charges including rape and sexual molestation, alleged to have been committed when he visited Stockholm in August.

Mr Assange, who gave his home address to the court as Australia, said that he would fight extradition, but his application for bail was rejected.

District Judge Howard Riddle said he was refusing bail because there was a risk that Mr Assange would fail to surrender despite offers to stand surety from several well-known personalities including Jemima Khan, the sister of the Tory MP Zac Goldsmith, the film director Ken Loach and the veteran journalist John Pilger.

The judge ordered Mr Assange to appear again before City of Westminster Magistrates' Court on Tuesday, though the extradition process could take months to run its course.

After the hearing, his legal team said that they would be making a renewed application to get Mr Assange freed, probably today.

Mr Assange, who denies the allegations and says that his sexual encounters with the two women were consensual, told The Guardian newspaper last week that he believed the charges were politically motivated to silence the embarrassing leaks his organisation has been publishing.

His lawyers also fear that if he is taken from the UK to Sweden it will be easier for US authorities to extradite him. Peter King, Republican US Congressman from New York who is the incoming chairman of the House Homeland Security Committee, reiterated his call yesterday for Mr Assange to be prosecuted under the Espionage Act.

Robert Gates, the US defence secretary, was informed of Mr Assange's arrest by reporters during a visit to Afghanistan. "It sounds like good news to me," Mr Gates said.

Mr King said he wanted the US to demand the extradition of Mr Assange.

Leading Democrats, including California's Dianne Feinstein, have echoed this view, and Eric Holder, the US attorney general, has said he has authorised "significant" action related to a criminal investigation of WikiLeaks, saying US national security has been put at risk.

Mr Assange's arrest came after a decision on Monday by PostFinance, the bank of the Swiss post office, to close Assange's €31,000 (Dh152,000) account there on the grounds that he was not, as he had claimed, a permanent resident of Geneva.

WikiLeaks itself has been the subject of cyber attacks recently. Additionally, two US internet providers have pulled the plug on the website and the French government has tried to ban servers from hosting the database.

Mr Assange has reacted by saying that, in case he is arrested or assassinated, he has taken out "poison pill insurance" by posting a host of classified documents, including damaging revelations about Guantanamo Bay and the BP oil spill in the Gulf of Mexico, in encrypted form on various websites.

He says that WikiLeaks staff have been instructed to distribute the secret pass phrase necessary to unlock the encryptions should anything happen to him, though his arrest yesterday is not considered likely to trigger such a move.

Although Mark Stephens, his British lawyer, describes the charges in Sweden as "a political stunt" aimed at silencing his client, the UK authorities say they had no option but to act after receiving the Interpol warrant.

In fact, Sweden applied to have Mr Assange extradited from the UK last month but the paperwork was not properly drawn up.

The error was the latest in a confusing series of events that has surrounded the sexual assault claims. The two women, one in her 20s and the other in her 30s, went to the authorities after each had met Mr Assange and had sex with him while he was in Stockholm attending a conference.

Initially, a prosecutor agreed that Mr Assange should be sought on suspicion of rape but was overruled by the chief prosecutor, who said that Mr Assange was not wanted in Sweden for any offences.

The two women then instructed a lawyer of their own, who pressed the Swedish authorities to take action and, last month, a warrant for Mr Assange's arrest was issued.

Kristinn Hrafnsson, a WikiLeaks spokesperson, told Reuters yesterday that Mr Assange's legal problems would not stop the release of more secret files.

"Wikileaks is operational. We are continuing on the same track as laid out before. Any development with regards to Julian Assange will not change the plans we have with regards to the releases today and in the coming days."

* With additional reporting by Omar Karmi in Washington.