Julian Assange has signalled he will remain inside the Ecuadorian embassy in London despite the Swedish authorities suddenly dropping a seven-year investigation against him.

The WikiLeaks founder made a rare appearance on the balcony of the central London building to hail the decision by Sweden’s director of public prosecutions as an “important victory”.

He gave a clenched fist salute to his supporters, and scores of journalists and TV crews, before maintaining that a “legal conflict” with the US and UK continued.

The Australian, who has lived inside the embassy for almost five years, said the “road is far from over”, adding it was “extremely regretful” that he was still being threatened with arrest if he left the embassy.

Assange said he had spent seven years either under house arrest or living inside the embassy, without charge, as he faced rape allegations in Sweden, which he has always denied.

He said he had missed seeing his children growing up. “That is not something I can forgive, or forget,” he said, maintaining that he had been the victim of a “terrible injustice”.

Detention and extradition without charge had become a feature of the EU, but it was not something expected from the rule of law in the UK, he said.

Assange thanked the government of Ecuador for granting him political asylum despite “intense pressure”, as well as his legal team and others who had stood by him.

“We have today won an important victory, but the road is far from over. The proper war is just commencing.”

He promised that WikiLeaks would continue distributing material about the activities of the CIA in the US, and would “accelerate” its publications.