Russia's Foreign Ministry summoned British Ambassador Antony Brenton on Monday for a tough reprimand over London's decision to disobey Russian government orders to shut down operations of the British Council in Russia.
"The ambassador was told that the Russian side regarded such actions as deliberately provocative and aimed to escalate tensions in Russian-British relations," a Russian Foreign Ministry statement said.
It added that Russia will refuse to issue visas to British Council staff members working in Russia, or renew documents for those already here.
But Brenton emerged from the meeting saying the British Council will continue to operate in Russia, and that any attempts by authorities to forcibly close it would be "illegal". "We have a serious dispute here," Brenton told journalists. "But we need to be careful that this situation doesn't spread to our cooperation in other areas."
On Monday Britain re-opened its St. Petersburg and Yekaterinburg branches of the British Council, the cultural wing of the British embassy, in violation of an explicit Russian government ban on the group's operations around Russia.
"We are open and intend to continue our work," a British Council spokesman in St. Petersburg told journalists.
British Foreign Minister David Miliband deplored the move and told journalists that Russia was using the cultural foundation as "a political football" amid a wider chill in relations between the two countries.
The dispute is ostensibly over the British Council's status as a tax-exempt foundation. Russian authorities believe it earns huge profits marketing its English-language courses around Russia, and say it ought to be taxed as a commercial enterprise.
But most experts believe the demand that the Council's shut down its operations is actually fallout from the deepening diplomatic chill between the two countries that began with the sensational radiation murder of an anti-Kremlin ex-KGB agent, Alexander Litvinenko, in London 14 months ago.
The prime suspect identified by British investigators, Andrei Lugovoi, far from being extradite to stand trial in London, was elected to the State Duma, Russia's lower house of parliament, which confered parliamentary immunity upon him.
Britain is one of the largest foreign investors in Russia, and experts worry that the current downturn in relations could cause worsening economic ties.