Work on the new Legation began in February 1939, but in April was abruptly stopped by the crisis following the Italian invasion. London instructed Ryan to suspend all work on the new Legation. The contractor, Mr. A. Motta, was worried about how long he would have to keep in Albania specialist artisans he had brought in from Italy. The Italian invasion of Albania had inevitably raised the whole question of the future of British representation. Once the Italians assumed responsibility for Albania’s foreign relations, there was no place for diplomatic (as opposed to consular) representation in the country. There was a view that the Legation building, in a more reduced form, could be used as a Consulate General. Officials in London believed that, if the building had to be abandoned, His Majesty’s Government could probably get a fair price for it from the Italians. It had been anticipated that the Legation would move to Tirana in the late summer of 1939.

Thus, it was decided that the Minister should remain in Albania, but as Consul General reflecting the new situation. However, in the event, Ryan himself only remained until June 1939. But work on the Legation was to continue. On his departure, Ryan praised all his staff and in particular two local staff, one "an Albanian from Yugoslav Kossovo" and the other a "Russian naturalised Albanian".

Frederick Herbert Gamble became Consul General after Ryan. In July 1940, at the request of the Italian authorities (the Italians had by this time entered the War), Viscount Halifax evacuated the Consulate-General at Durres and transferred the Government and private effects into storage at the British Government House in Tirana. Mr. Motta, who had been the engineer responsible for the building works, became the custodian.

During the Second World War a number of British Special Operations Executive (SOE) missions were sent into occupied Albania. The British soldiers made contact with both communist and non-communist resistance groups and helped in their struggle against the German occupiers after 1943.

After the end of the War, on 10 November 1945 Britain recognised the new Albanian regime and agreed to exchange diplomatic representatives. Although a representative was nominated, he never took up his post. The Albanian attitude towards the United Kingdom appeared to change. Restrictions were placed on the work and movement of the British Military Mission, which had arrived to an enthusiastic welcome in March 1945. A War Graves Mission whose task was to find and inter British servicemen killed during the War was expelled. An official on the staff of the British Minister-Designate, who for a considerable period had rendered excellent service to Albania as a liaison officer with the Albanian partisans, was refused a visa. The Mission was eventually withdrawn in April 1946. Though it is not entirely clear from files, the Mission may well have been house in Saraci’s villa, but the Legation was never established there. When it was next heard of, this house had come into the ownership of the Albanian State as Villa 30.

Discussions on the re-establishment of diplomatic relations were finally broken off as a result of the Corfu Channel incidents. In May 1946 the Albanians fired on two Royal Navy Cruisers and in October 1946 two Royal Navy destroyers were damaged by mines with the loss of 44 men. Britain was awarded damages at the International Court of Justice in The Hague. Albania refused to recognise the judgement. In retaliation, Britain refused to permit the release of Albanian gold held since the War by the Tripartite Gold Commission. When the British Military Mission left, its property was handed into the care of the United States mission, although the French had earlier agreed to look after it. The US mission left Albania later in 1946 and France was again asked to take over the protection of British property and interests in Albania.

In 1981 the British Government proposed to the Albanian Government that diplomatic relations be restored without waiting for a resolution of the financial dispute, but the Albanian communist authorities did not agree. The offer remained open and the UK continued to offer talks without preconditions. In March 1985 talks on the Albanian gold were held in Paris. The talks were interrupted by the death of Hoxha and were not restarted again.