Read Faith Central on Putin's holy Christmas message

High on a ladder in a remote village 30 miles down an unmade road beyond Kostroma in the far north of European Russia, Father Georgi Edelstein holds bricks in his disabled hand and, with the other, cements them into a gap in the wall of his country church. A gang of convicts is helping him with the reconstruction work - “The state destroyed my church: you can help rebuild it,” Edelstein had told the local mayor.

Similar scenes of repair and rebuilding can be seen in many of Russia's 89 regions as the Russian Orthodox Church enjoys a startling revival. Restored churches can be seen everywhere. Official sources state that there are now some 28,000 parish churches, 732 monasteries and convents and many priests are in training in new seminaries.

The revival is not merely a regional phenomenon. The Moscow Patriarchate, the policy-making body of the Russian Orthodox Church, now acts as President Putin's agent in extending his control over all sectors of society. And since Dmitri Medvedev, Putin's anointed successor, is also a practising member of the Orthodox Church, no change in that relationship seems imminent.

The extent of this revival in the Church's influence would have been unimaginable when Mikhail Gorbachev achieved power in 1985. Even under Brezhnev believers were still being imprisoned; all were deprived of Christian education and literature.

Such apparent contradictions in the status and role of the Church go back to the early Soviet era when Metropolitan Sergi, under severe duress, signed a declaration of loyalty to the Soviet State in 1927. It has never been repudiated. The last act of a group of bishops in the Solovki island prison in the Arctic Ocean was to compose a letter denouncing Sergi's policy, but they died alone. Stalin granted no privileges in return for the compromise; the terror mounted, until the Second World War brought a change.

In 1943 Stalin summoned the free bishops to the Kremlin; the resulting concordat remains the norm even today: there would be no criticism of Government policies by Church leaders. The State would control Church institutions and appointments; only with the accession of Gorbachev did this change. He sanctioned a new law in 1990 granting complete freedom of religion, but many, both communists and leaders of the Russian Orthodox Church, regarded this as a licence for anarchy and before long President Yeltsin yielded to the old guard, both secular and religious. His law of 1997 accorded - for the first time since before 1917 - a privileged position for the Orthodox Church (along with other “traditional religions” - Islam, Judaism and Buddhism). Protestants, Catholics and all other Christian denominations had second-class status.

This law contradicts the separation of church and state proclaimed by the constitution, but is not widely implemented by the police or the judiciary. However, local attacks against Protestants do occur. In Kaluga, on December 27, members of Nashi (Ours, the extremist pro-Putin youth movement) smashed all the windows of a Baptist and a Pentecostal church on the same night. Was this locally co-ordinated, or did a directive come from above? The law is semi-dormant but could be animated at any moment, should the Kremlin wish to lean on minorities.

Even without this, however, the Moscow Patriarchate acts as though it heads a state church, while the few Orthodox clergy who oppose the church-state symbiosis face severe criticism, even loss of livelihood. In recent times no bishop has criticised any aspect of Kremlin policy. Patriarch Alexi II has on several occasions blessed the Russian Army, most notably when it was about to descend on Chechnya, to destroy Grozny, the capital, and beat the local people into submission. Orthodox priests recently sprinkled holy water on a new Triumph surface-to-air missile. On September 4 last year the Patriarchate marked the 60th anniversary of the establishment of the Soviet nuclear arsenal with a thanksgiving service in the new Cathedral of Christ the Saviour in Moscow. The building teemed with senior military personnel wearing badges in honour of St Serafim of Sarov, whose monastery is near Arzamas, a centre of the nuclear industry.

Long since the Moscow Patriarchate defrocked Father Gleb Yakunin, a Moscow priest who, as an elected deputy in 1990, had privileged access to the KGB archives and discovered that the collaboration between some bishops and the state security agencies had been worse than even he had imagined. The Church has never properly investigated this, clearly because so many of the bishops, not least the Patriarch, rose to power with the say-so of state authority.

Sometimes it is the local bishop who acts as an agent of secular power. Father Sergei Taratukhin was imprisoned in the 1980s as a Soviet-era dissident. In prison he became a believer, trained for the priesthood and became chaplain in Penal Colony No10, near Chita in eastern Siberia. He served there seven years, befriending an inmate, Mikhail Khodorkovsky, condemned by a Moscow court in 2005 for financial misdemeanours in a trial widely seen as politically motivated.

Taratukhin became convinced that Khodorkovsky was a political prisoner and campaigned for him. Bishop Yevstafy, his diocesan, intervened and removed him to a remote parish. Taratukhin objected, so his bishop defrocked him. Now the priest has appeared abjectly contrite on TV, in a scene reminiscent of clergy who recanted their anti-Soviet activities in former days. The bishop has offered him forgiveness and partial reinstatement - he now organises rubbish collection and shovels snow from the paths around Chita's new cathedral.

The evidence of Keston Institute's Encyclopaedia on Religion in Russia Today (now nearing completion with the imminent publication of the eighth volume in Russian) supports the contention that, although the Russian Orthodox Church is not established in law, in practice the state treats it as such.

Canon Michael Bourdeaux is the president of Keston Institute, Oxford