The Foreign Office angrily dismissed Russia's conduct as "completely unjustified" after a turbulent day in which the British ambassador to Moscow, Sir Andrew Wood, was summoned to the Russian Foreign Ministry for what was described by the Federal Security Service (FSB) as a "stern rebuke".
Underlining the seriousness of the affair, Malcolm Rifkind, the Foreign Secretary, briefed the Prime Minister before leaving Edinburgh for a meeting of Western European Union foreign and defence ministers in Birmingham. He warned that Britain would respond if there were expulsions. "The nature of that response would depend on Russia's direct actions," Mr Rifkind said when he arrived in Birmingham last night.
The affair is the worst spying row between Moscow and London since 1989.
Last night, it was unclear what retaliation Britain would take, although the Foreign Office promised an "appropriate response" if the expulsions go ahead, which suggests that it is considering throwing out some Russian officials.
According to the FSB - the heir to the KGB - Russian intelligence agents arrested an agent for the British Secret Intelligence Service (MI6) after he was "caught red-handed" trying to communicate with his controller.
According to a spokesman, the man was found to have espionage equipment and confessed to working for British intelligence, giving "detailed evidence of the way he was recruited", and information about his contacts.
The FSB said the agent, whom it did not name, was a Russian national, recruited in the mid-1990s, who worked in a department of the Russian federal government. He had been handing over classified material of "political and defence-and-strategic importance to British intelligence" in return for payments. The Russian news agency Interfax said the alleged spy will now be tried for high treason, which carries a possible death penalty.
Russian has not said how many British diplomats it plans to expel, saying only that it will be "a number" of them who had contacts with the alleged agent. However, the state-controlled Russian television channel, RTR, said it could be from four to as many as 12.
Russian officials appear to believe that the British Embassy in Moscow - an old merchant's mansion overlooking the Kremlin from the banks of the Moskva river - is a hotbed of spies. Yet just over a fortnight ago, John Major - whose administration supports Boris Yeltsin - sat in the same building and announced an aid package for Russia.
As tempers frayed between Moscow and London, a spokesman for the Russian Foreign Ministry called for calm, saying "such incidents sometimes happen in international relations", and adding that he hoped it would not affect Russian-British relations.
The number of British diplomats to be expelled will be made public today, he told the Interfax news agency.
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