Russia's Lavrov calls for normal ties with Britain

Russia's Foreign Minister Sergei Lavrov seen during a news conference in Minsk in this June 28, 2007 file photo.Russia said on Friday it hoped to restore normal relations with Britain following tit-for-tat expulsions of diplomats this week, but business leaders said commercial ties could suffer.

MOSCOW (Reuters) - Russia said on Friday it hoped to restore normal relations with Britain following tit-for-tat expulsions of diplomats this week, but business leaders said commercial ties could suffer.

"Russia is interested in having relations with Britain brought back to normal," Foreign Minister Sergei Lavrov said during a visit to Berlin.

"We proceed from the assumption that they should be based on respect for each other's interests and common sense. We are prepared for this," Lavrov said.

But a powerful Russian business lobby warned British companies that they might have to fight harder for business in Moscow after the strain in relations, and Russian firms could steer clear of London.

A Russian murder suspect at the heart of the diplomatic row also criticised Britain, and Norway's armed forces worried about Russian bombers' sorties over the North Sea.

Lavrov denied Moscow had broken off contacts with Britain in the fight against terrorism as a reprisal for the expulsion of four Russian diplomats from London. He said it was Britain that had stopped co-operating with Russia's security service, the FSB, which in his country leads actions against terrorism.

Russia expelled four British diplomats on Thursday as the row escalated over Moscow's refusal to extradite Andrei Lugovoy, suspected of killing Alexander Litvinenko, a former Russian intelligence officer, in London last November.

"What we did yesterday only follows the situation created by our British colleagues," Lavrov said.

TENSIONS SPILLING OVER

A powerful Russian business lobby warned that British firms will lose favour with Moscow after the spat, while Russian firms may snub the London Stock Exchange.

"Perhaps, under broadly equal conditions, some (British) companies may fail to win tenders," RIA Novosti quoted Alexander Shokhin, head of Russia's Union of Industrialists and Entrepreneurs, as saying.

"If events develop in this way, Britain's trading floors -- traditionally favoured by Russian companies, including state-run companies -- will start losing ground," he said.

A banking source in Moscow said a benchmark dollar-denominated bond by Russian gas monopoly Gazprom could be postponed but added that at the moment the signals were it would go ahead.

On Thursday, two Russian Tu-95 bombers made unusually long sorties over the North Sea, forcing NATO members Norway and Britain to scramble fighter jets to follow them, Norway's armed forces said.

"It's a long time since they (Russian bombers) have been that far south. I would say that is rather unusual," John Inge Oegland, spokesman for Norway's armed forces, told Reuters.

The incident was the latest of several sorties in the past few days. Russia's air force commander said this week the sorties were training flights for the long-range bombers.

In Moscow, Lugovoy took a swipe at Britain, accusing it of generating anti-Russian sentiment across the world.

"London had always been at the centre of anti-Russian opposition," he said during a live radio interview. "Britain has always sheltered fraudsters, adventurers and defectors of all kinds."

Lugovoy said Litvinenko had been recruited by British secret services and that he had been murdered "at their connivance and with their tacit acceptance."