David Miliband’s decision to punish the Kremlin for its failure to hand over the chief suspect in the Alexander Litvinenko murder investigation risks provoking a bruising battle that Britain cannot win.

In expelling four Russian diplomats and taking other bilateral measures against Moscow, the Foreign Secretary demonstrated to the world that the new Government of Gordon Brown will not shy away from thorny foreign policy issues.

On one level the Government had no option but to act. As Mr Miliband pointed out to the Commons, a British citizen had been murdered in London in November with a deadly poison.

An exhaustive investigation by Scotland Yard produced strong evidence linking Andrei Lugovoy to the killing. The Crown Prosecution Service concluded that the former KGB agent, currently residing in Moscow, had a case to answer.

Russia’s refusal to extradite the suspect triggered today's action in London, probably the minimum necessary to register Britain’s anger over the incident and prevent a similar action happening again.

While many world leaders might privately applaud the British move, few would envy being engaged in a scrap with President Putin, who has earned the reputation as one of the toughest players on the global stage.

British diplomats were braced this evening for a reprisal action. At best this will take the form a tit-for-tat expulsion of British diplomats from the Embassy in Moscow.

But it is possible that the Russians will go further. On a commercial level Britain has much to lose. Good relations with the Kremlin are essential to secure lucrative gas and oil contracts.

Any country engaged in a public running battle with Mr Putin is unlikely to receive any favours from Moscow, which last week signed a deal with the French energy giant Total.

The Russians are also important players internationally. With a permanent seat on the United Nations Security Council, and the right to veto resolutions, Moscow can make life very difficult on a number of British foreign policy priorities.

The Kremlin’s support is seen as vital in maintaining pressure on Iran to curb its nuclear programme. Its support is also necessary for progress in the Middle East, where the Russians have a seat in the Quartet Group. The Kremlin is seen as part of the solution to the crisis in Darfur, North Korea and just about every major global flashpoint.

The bilateral row could deteriorate further security cooperation with Russia. Angered by American plans to build a missile defence shield in eastern Europe, Moscow announced at the weekend that it was suspending all participation in the Treaty on Conventional Forces in Europe.

British diplomats said that they hoped the dispute over Litvinenko would be contained to bilateral relations and not spread to other issues.

But in the politically-charged atmosphere ahead of the Russian presidential elections next year, Britain’s move could provoke unpredictable and unpleasant reactions from an increasingly xenophobic and vindictive regime in Moscow.

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