Russia targets UK interests with 'spy' arrests

The Kremlin appeared to have renewed its hostile campaign against British interests and big business in Russia today when the secret police arrested two men on espionage charges after raiding BP's Moscow headquarters.

The arrests came a day after officers seized computers and documents at the offices of the energy giant's joint Russia venture TNK-BP, raising fears among investors that the Kremlin is planning to grab one of the last sizeable oil and gas assets not under state control.

The strong-arm tactics, which will rekindle memories of the Kremlin's systematic destruction of the Yukos oil company, are likely to sour already strained relations between Russia and the West.

The authorities were unable to give an official explanation for the first raid on Wednesday, which represents the latest but potentially the most serious escalation in the government's campaign against TNK-BP, Russia's third-largest oil company.

Ilya Zaslavsky, 29, a mid-ranking executive at TNK-BP, was arrested on espionage charges along with his brother Alexander, 33, who does not work for the company.

The Federal Security Service (FSB), the intelligence agency which succeeded the KGB, accused the two men of industrial espionage as part of a plot to weaken Russia and said they were in possession of business cards belonging to CIA operatives and representatives of other foreign spy agencies.

The FSB falsely claimed that Alexander Zaslavsky worked for the British Council, which was forced to close its outlets outside Moscow earlier this year.

Both men were known as anglophiles who had won grants through the British Council to study at Wellington College and at Oxford University.

Government officials have opposed the awarding of scholarships to Russian students to study in Britain, claiming it is a plot to recruit them into MI6.

Alexander Zaslavsky, 33, is the president of the British Alumni Club, a group for Russians who studied in the United Kingdom that has close ties to the British Embassy in Moscow, which itself has come under a campaign of intimidation by Kremlin-backed youth groups.

Both men also signed an open letter to President Vladimir Putin urging him to reverse the closure of the British Council's offices, a gesture that infuriated officials.

Ilya Zaslavsky, 29, appeared on a radio programme last year in which he heavily criticised Mr Putin. He is also a member of a group on the social networking website Facebook that pokes fun at Mr Putin.

Free speech in Russia has been heavily curtailed in Russia since Mr Putin came to power and several individuals have been detained on charges of insulting the president.

Last year, the Kremlin forced BP to surrender control of the Kovykta gas field, the company's single most important asset, prompting fresh accusations that Mr Putin's government had trampled over the concept of private property rights.

Kovykta is being taken over by Gazprom, the state gas giant that is headed by Dmitry Medvedev, the loyal ally Mr Putin has chosen to replace him as president on May 7.

The seizure of Kovykta, which followed the expropriation of significant assets owned by Royal-Dutch Shell, caused significant tension between London and Moscow as well as raising alarm in the rest of Europe.

Enjoying the fruits of an economic boom built largely on the country's vast energy supplies and the soaring price of oil, the Kremlin has been determined to wrest control of companies that were privatized following the collapse of Communism.

That process is already well underway and the vast majority of Russia's energy assets are now run by a shadowy cabal of Mr Putin's Kremlin cronies ostensibly in the name of the state.

Analysts predict that the Kremlin now wants to complete its heist, a move likely to disappoint optimists in Europe who hoped that Mr Medvedev would prove a more liberal manager of the economy than his predecessor.

The European Union is growing increasingly dependent on Russian energy, which the Kremlin has used on occasion to further its political ambitions to restoring the superpower status it lost when the Soviet Union imploded. Sources at TNK-BP accused Gazprom of being behind the raid in an attempt to force two major Russian shareholders, Viktor Vekselberg and German Khan, to surrender their shares at a knockdown price.

Both men are among the world's hundred richest individuals, according to Forbes magazine. Once Gazprom gains a foothold in the company it will be easier to force BP out, analysts said