The strained relations between Britain and Russia took another turn for the worse yesterday when the Russian authorities ordered the British Council to curtail its activities.
The council, which promotes English language teaching and cultural exchanges in Russia, vowed to ignore the order and continue working.
Relations between the two countries have been icy ever since the former Soviet state refused to extradite Andrei Lugovoy, wanted for the radioactive assassination of Alexander Litvinenko in November 2006. Mr Lugovoy was last week elected a member of parliament and is now immune from extradition.
In the latest move from the Russians, a spokesman for the Russian Foreign Ministry ordered the British Council to shut all its offices outside of Moscow by the end of the year, accusing it of violating Russian tax laws.
But a British Council spokesman said: " We have complied with all applicable laws, including tax and labour laws, and have no plans to shut down."
The Foreign Secretary David Miliband described the country's decision as "very serious", and has backed the council's pledge to carry on working. A Foreign Office spokesman said: "Britain strongly rejects any attempt to link the council to Russia's failure to cooperate with our efforts to bring the murder of Alexander Litvenenko to justice."
Analysts said that the order from the Russians is likely to be about lingering resentment against Britain over the spy saga.
Fyodor Lukyanov, editor of Russia in Global Affairs magazine, said the decision probably came directly from the Kremlin. He said: "It was clear that this decision would provoke a pretty major reaction and so there would almost certainly have been consultations on a very high level. After the heated exchanges of the summer, there has been a pause, but nothing has got better. Economically, relations are good. But politically they are not and I don't see any prospects for improvement."
The Russian Foreign Ministry was also left angry after British authorities expelled four Russian diplomats this summer. The last two weeks have suggested a new campaign against British interests in Russia may be under way.
In late November, three BBC employees were injured in three separate attacks in Moscow. An organisation spokesman said they were "exploring the possibility" the attacks were not random. The BBC World Service was also hauled off its Russian FM radio station earlier this year.
Last week, the Kremlin-backed youth group Nashi held a protest outside the British embassy, waving placards featuring pictures of British Ambassador Sir Anthony Brenton with the word "Loser" stamped in red on his forehead.
The group accuses Britain of meddling in Russian politics and supporting opposition groups.
The Russian authorities have long been wary of the work of foreign non-governmental organisations in the country, and President Vladimir Putin has accused many of getting involved in Russia's internal affairs.
With an election coming up in March, the authorities may be keen to send a warning shot to any critical foreign organisations.