This nuanced and cautious take on Anglo-Russian relations from the Daily Mail.....

Murder, caviar and why our relations with a thuggish Kremlin are at their worst since the Cold War

By Edward Lucas

Gordon Brown's personal relationships with foreign leaders are not his strong suit. He is regularly out-dazzled by Nicolas Sarkozy and outmanoeuvred by George Bush.

But in his meeting with Russia's new president, Dmitry Medvedev, this week, he showed commendable - and rare - resolve in withstanding the Kremlin's trademark mixture of bullying and blandishments.

In the run-up to the meeting on the fringes of the G8 summit in Japan, Medvedev made it clear that he was prepared to thaw what has become a new Cold War between the UK and Russia - but only if Britain met him half-way. Brown refused.

Cool reception: Russia's president Medvedev and Gordon Brown shake hands but the bodly language betrays suspicion

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• London-Moscow relations worsen as the Kremlin brand a British envoy a spy

Tony Blair may have kow-towed to Vladimir Putin, who made hollow offers of friendship. But Mr Brown has proved himself determined to stand up to an increasingly bellicose, and wily, Russia, which is possibly why the Kremlin retaliated by yesterday naming a top embassy official as a British spy.

Before this week's get-together, the siren voices of appeasement in Britain were crooning at top volume. For most British exporters, trade with Russia is booming.

Moreover, London is the place where Russian companies like to list their shares, sell their bonds and bank their profits, and a phalanx of pin-striped admirers are profiting richly from that. It is in British public schools that Russia's elite educate their children and it is in Britain's high society that they find the glitz and respectability they crave.

So in the City, in big business, and in the political and social elites so lavishly courted by Russia's spin-doctors, the hope was that with a new man in the Kremlin, perhaps Downing Street would get things 'in perspective' and put past political difficulties aside.

In other words, what does murder matter when profits are at stake? Who cares that Alexander Litvinenko was a British citizen when he was poisoned in November 2006? Who cares that the prime suspect in that murder became a celebrated Russian politician?

Who cares that another Kremlin assassin was caught stalking a British resident, Boris Berezovsky, through the streets of London last summer? Who cares that Britain's outgoing ambassador in Moscow, Sir Anthony Brenton, was mercilessly hounded by the thugs of Nashi, the 'Putin Youth' movement?

And who cares that the Russian staff of the British Council in St Petersburg were hauled from their beds in the middle of the night for interrogation?

Luckily for us, and for our brave allies in Eastern Europe who live in the shadow of a resurgent Russia and have been forced to look for security under the umbrella of the proposed U.S. missile defence shield, Mr Brown cared.

The view from Downing Street is that if Russian-British relations are indeed at their worst since the days of the Cold War, that's their fault, not ours.

There are those in Britain who refuse to believe this. With champagne, caviar and cash, the Kremlin is infiltrating Britain and buying friends and influencing people in a way that would have been unimaginable during the last Cold War.

But for now at least, this seduction only goes so far. Stiffening Britain's backbone are the security and intelligence services, usually known by their unofficial titles, MI5 and MI6.

Jonathan Evans, the sharp-witted director of MI5, has authorised an unprecedented level of semi-official briefing on the issue and Russia's rampant espionage has infuriated his hard-pressed spycatchers. Russia is now rated the third biggest security threat facing Britain, beaten only by the threat from Islamic terrorists and rogue states.

On BBC2's Newsnight this week, a senior security official gave a remarkably crisp public quotation, blaming the Kremlin for the Litvinenko murder. Short of hanging a banner from his top-floor office in the hulking MI5 headquarters at Thames House, Mr Evans's message could not have been clearer.

It is the same story at MI6, which for years has battled with the Foreign Office's supine and gullible attitude towards the Kremlin. At their green-glass headquarters across the Thames, the veteran Cold War spooks at last feel vindicated.

They warned back in the 1990s, when Russia was supposedly democratic, that the KGB was still up to its old tricks. They rang alarm bells when Mr Putin, a KGB veteran, took power. They highlighted the dangerous overlap between the business, political and secret-police worlds in the new Russia. Now they have been proved right.

And Britain's top spymaster, Alex Allan, has been stricken down by a mysterious illness that has left him in a coma. It is almost certainly just a tragic coincidence. But in some minds, the timing, just before the Brown-Medvedev summit, gave it a potentially sinister twist.

After all, what better way of warning those who defend Britain's interests not to confront Russia than to strike down their spy boss with an untraceable, near-lethal poison?

Nobody in the world of shadows wants to entertain that notion. But neither will they deny that the old KGB - chiefly the FSB, its sinister successor - has the ruthlessness, and the technology, to do such a thing if it wanted.

It would be a gross exaggeration to say that Britain's Russia-watchers are living in fear. But we are all aware that the Moscow authorities now have the right (under Russian law) to order the execution of ' extremists' at home and abroad.

Even some British businesses are beginning to concede that Russia isn't so rosy after all. Britain's top oil-men pooh-poohed Tony Blair's warning about betting too heavily on Russia last year.

Shell has lost the majority of its huge Sakhalin venture, and BP is being driven out of its joint venture with TNK, a Russian firm whose owners' brains are matched only by their muscles.

Outrageous though the tactics used against it have been, I have little sympathy for BP. The company has been burned before by a joint venture with the same bunch of people in the 1990s - and its shareholders should be justifiably aggrieved that the managers they employ have failed to learn from that lesson.

But the British Government is right not to get too closely involved in the case - not least because one factor may be an attempt to soften Britain's position on other issues, such as the Litvinenko murder.

Russia may be failing in its attempt to browbeat Britain, but it is doing well elsewhere, particularly in continental Europe, where the ruthless use of bribes and energy blackmail have corralled countries such as Germany, France and Italy into the Kremlin camp.

Both the European Union and Nato now stand pitifully divided. The business interests of their big members leave them unable to defend countries that are at risk from Russia. Coupled with a Russophile French presidency of the EU for the next six months, the sun is shining on the Kremlin - and its denizens are making all the hay they can.

No wonder that countries such as the Czech Republic and Poland believe only a direct relationship with America can guarantee their security. And no wonder Russia is reacting so toughly to the incipient deal on American missile-defence bases (aimed to deter Iran, not Russia) in those countries.

It said this week that it would respond with 'military-technical means' (new weapons) if the American plan goes ahead.

The bleak truth is that nothing in Russia has changed. The diminutive, softly-spoken Mr Medvedev may look and sound different to his thuggish, foul-mouthed ex-KGB predecessor, Vladimir Putin. But his politics are the same: what's mine is mine, what's yours is negotiable.

The political system is still closed to competition, corruption is rampant, and the economy is a shambles outside the big cities. This incompetent, but menacing, regime is bad for both Russia and Europe. But only Britain and a handful of allies seem to be prepared to do anything about it.