The astonishing confrontation ended with the paramedic saying to the warden 'If you ever need an ambulance...' before shrugging and walking away.
He will keep his job, employer Euro Parking Services later confirmed, but he will be retrained.
EPS confirmed the fine was 'cancelled within the hour'.
The company added it had apologised to the ambulance service, was making a donation and would be changing its training procedures to ensure such an incident does not happen again.
The footage prompted outrage on social media with even television presenter Nick Knowles admonishing the worker on Twitter.
But others have defended the warden claiming he was just doing his job and the paramedic should have done more to find a suitable space.
The car park is part of a private retail park owned by London & Cambridge Properties who employ Euro Parking Services to monitor parking.
The firm said it was 'disappointed' at the incident and would be reviewing its contract with EPS.
It is unknown exactly how much the fine was but typically private car park tickets are usually between £70 and £100.
DIY SOS presenter Knowles said to Tesco on Twitter: "So you don't feel you can support an emergency services worker stopping at your store for water - not your problem?"
He added the supermarket was "morally separating itself" from the problem by outsourcing its parking management.
When contacted by Tesco, who told him it did not own the car park and was not responsible for enforcing car park fines, he added: "Could you please supply us with the name of the company so WE might ask them to be more supportive of ES workers?
"Will you be talking to the parking company to express your concerns? After all - every little helps? Or not?"
Meanwhile other Twitter users were quick to become angry over the situation.
One said: "He spent that long arguing with her she could have been in, had lunch, her bottle of water and watched a film. Jobsworth."
Another added: "Disabled permit holders and vehicles loading are permitted to stop of double yellows (expect with dashes on kerb).
"Emergency service crews are more important, it's integral having them refreshed and not a five minute walk from their vehicle where possible."
But others supported the warden, with one Twitter user said: "For real? the guy is 100% (sic) right. The ambu (sic) was not on call and illegally parked."
The footage begins with a conversation between the man filming the incident and the warden, with the cameraman asking why the ambulance was ticketed when it was 'on call'.
The warden said: 'It's not on call. It's not on call. She was having lunch. Where are the sirens? It is parked up on a double yellow line.'
The cameraman replied: 'They don't use the sirens when they are parked up you idiot.'
But the warden was unmoved and continued to stress the paramedic was 'getting food'.
She then returned to the vehicle and asked where she was supposed to leave the ambulance.
She said: 'Where would you like me to park? It won't go in a bay; I can't fit it. I'm not going to leave it in a disabled space.
'I've been on since 6.45am this morning; I've had nothing to drink and nothing to eat and now I would like to go to Tesco to get some water.'
The heated exchange was filmed by outraged passerby Ian French, who claims the cap-wearing attendant told him he was 'proud' of issuing the ticket.
Mr French, 47, said: 'I felt so strongly about the unfairness of what was happening that I started filming on my iPhone, hoping to bring attention to what was happening to the hardworking paramedics.
'I believe they were just collecting some food and water eight hours into their shift.
'It is a private parking firm working for the landlord, who I believe owns the car park and the businesses around it.
'The parking enforcement signs were only installed a few weeks ago. The locals are not happy about it, nor are some of the businesses.'
The paramedic's words had no impact on the warden, who said: 'I understand. That's fine, but you can't be parking on a double yellow line can you?'
Meanwhile the cameraman continued to insist she was on call and should be able to leave the vehicle there in case she has to leave quickly for an emergency.
She said: 'Where would you like me to park? It won't go in a bay; I can't fit it. I'm not going to leave it in a disabled space.
'I've been on since 6.45am this morning; I've had nothing to drink and nothing to eat and now I would like to go to Tesco to get some water.'
The heated exchange was filmed by outraged passerby Ian French, who claims the cap-wearing attendant told him he was 'proud' of issuing the ticket.
Mr French, 47, said: 'I felt so strongly about the unfairness of what was happening that I started filming on my iPhone, hoping to bring attention to what was happening to the hardworking paramedics.
'I believe they were just collecting some food and water eight hours into their shift.
'It is a private parking firm working for the landlord, who I believe owns the car park and the businesses around it.
'The parking enforcement signs were only installed a few weeks ago. The locals are not happy about it, nor are some of the businesses.'
The paramedic's words had no impact on the warden, who said: 'I understand. That's fine, but you can't be parking on a double yellow line can you?'
Meanwhile the cameraman continued to insist she was on call and should be able to leave the vehicle there in case she has to leave quickly for an emergency.