Reuters reports:

Britain on Tuesday defied a Russian order to close the regional offices of its cultural arm from New Year's day, but there was no evidence of Russian attempts to forcibly close British Council centres, Russia on December 12 ordered the British government's cultural arm to halt work from January 1 at all its regional offices, saying Britain had broken a host of international and domestic rules. The move was part of the fall out from a bitter row over the murder of former Russian agent Alexander Litvinenko, a critic of the Kremlin who was poisoned by radiation in London in November 2006.

Relations between Britain and Russia are at their worst since the Cold War, soured by the Litvinenko murder, mutual espionage allegations and the political asylum given by Britain to prominent Russian enemies of President Vladimir Putin. "It is our firm point of view that the British Council operates with a fully legal status and in accordance with international law and agreements with the Russian government," a spokesman for the British embassy in Moscow said by telephone. "We hope their operations in St Petersburg and Yekaterinburg will continue when these offices open after the New Year break," the spokesman said. The Russian New Year holiday normally lasts for the first two weeks of January.

The Council's offices in the northern city of St Petersburg and the Urals city of Yekaterinburg were closed on Tuesday for the break. A Reuters reporter said the business centre which houses the St Petersburg office was closed with no signs of any police presence. An answer machine said it would reopen on January 14. "We have every plan to continue," Clare Sears, a British Council spokeswoman, said by telephone from London. "We are in constant discussion with the Russian authorities and we are very much hoping this can be resolved over the next two weeks." When asked if the British Council would open its offices after the New Year holiday, Sears said: "We will do everything in our power to do so."

Britain reacted angrily to Moscow's demands to halt the British Council's work. Prime Minister Gordon Brown said last month that the ban was totally unacceptable and called on Moscow to reverse its decision. The British Foreign Office said the Council had nothing to do with the dispute over Litvinenko's murder, which sparked a tit-for-tat expulsion of diplomats in July. Russia said Britain had broken rules while registering 15 regional offices of the British Council, a claim London denies. The Council had earlier closed regional Russian offices everywhere in Russia except Moscow, St Petersburg and Yekaterinburg.

Britain and Russia are linked by tens of billions of dollars in trade and investments, including a major stake in Russian oil producer held by BP and the gilded flow of Russian money and investment through the City of London. But anger over the Litvinenko killing has damaged relations. Britain in July expelled four diplomats in response to Russia's refusal to extradite another former state security agent, Andrei Lugovoy, to stand trial for Litvinenko's murder. Russia followed that by expelling four British diplomats. Lugovoy denies any part in the murder.