Russia accused Britain today of behaving like an imperial master as the bitter row over the future of the British Council intensified.

Sergei Lavrov, the Foreign Minister, said that Britain’s defiance of an order to close the council’s regional offices in St Petersburg and Yekaterinburg smacked of “nostalgia for colonial times”.

David Miliband, the Foreign Secretary, said that Russia was treating the council as a “hostage” in its conflict with Britain over President Putin’s refusal to extradite Andrei Lugovoy, the man wanted in London for the murder of the dissident former KGB officer Alexander Litvinenko.

Mr Miliband told the House of Commons that Russia’s actions were illegal and that Britain would respond to sanctions imposed on the Council by Moscow.

But Mr Lavrov said that Britain’s refusal to comply was “beyond understanding”, adding that the council had opened its regional offices without even seeking permission from the Russian authorities.

“Of course, we understand that the historical memory is probably related with the nostalgia for colonial times, and it dominates. But this is not the language in which one can talk to Russia,” Mr Lavrov said.

“What is happening around the British Council, when black is called white and with authorities in London turning everything upside down, is simply beyond understanding.”

Mr Miliband told MPs that the council was operating legally in Russia under a 1994 cultural agreement and its offices in St Petersburg and Yekaterinburg would remain open. Russia’s threats would only make relations worse.

“It is not in the interests of either the UK or Russia for flourishing cultural, educational and scientific links to be held hostage to unrelated issues in this way,” Mr Miliband said.

As the two sides traded insults, Russia’s ambassador to London repeated a warning that the council’s headquarters in Moscow would be the next target unless Britain bowed to the Kremlin’s demands.

Yuri Fedotov told BBC radio: “If the British Council will continue to defy the Russian authorities the next step would be, I would say, the British Council in Moscow.

“So far, the British Council office in Moscow was spared as an act of goodwill although all legal issues which are relevant with the regard to the offices of the British Council in other regions of Russia are also relevant for Moscow.” Mr Fedotov made clear that the council’s difficulties were linked to Britain’s demand for Mr Lugovoy.

Mr Putin refused to hand over the former KGB officer last July, citing a ban on extradition in Russia’s constitution.

Mr Fedotov said that Britain and Russia had been “very close” to reaching a new agreement on cultural cooperation when the extradition row blew up.

“Unfortunately the decision taken by the British Government to politicise the Lugovoy/Litvinenko case of course affected the whole state of our bilateral relations,” he said.

“At that stage, the further negotiations on the final conclusion of an agreement on cultural co-operation was suspended. Hence, the British Council has no legal basis of its operations in Russia.”

Mr Fedotov said that London had rejected a “zero option” offer to return to the state of relations before the row over Mr Lugovoy, who insists that he is innocent. Mr Litvinenko was murdered with radioactive polonium-210 in London in November 2006.

The Foreign Ministry summoned the British ambassador Sir Anthony Brenton on Monday to protest at the reopening of the Council’s regional offices after the New Year holiday. It demanded last month that they close on January 1.

The ministry banned visas for new British staff at both offices and refused to renew accreditation for existing employees. It threatened to recover unpaid taxes allegedly owed by the St Petersburg office and said that the Council’s entire operations in Russia were at risk if the defiance continued.

Britain insists that the Council is operating legally under the 1994 agreement with Russia. Mr Miliband told MPs that the Council complied fully with Russian and international law under the Vienna Conventions.

The diplomatic confrontation comes as relations between London and Moscow are already at their most frosty since the end of the Cold War. There were tit-for-tat expulsions of diplomats last July over the Litvinenko affair.

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