The UK expelled four Russian diplomats in response to Moscow's refusal to extradite a suspect in the murder of Alexander Litvinenko. In addition, the UK is suspending visa facilitation negotiations with Russia and making changes to visa practice relating to Russians. Russia has responded by expelling for UK diplomats from its country and will also review visa applications for UK officials.
Mr Miliband said Britain was halting a reform under negotiation with Russia to speed up Russian visa applications for diplomats and to fast-track visas for tourists and businessmen. Increased scrutiny of visa applications could also take place, especially for applications from government officials.
"London's position is immoral," said Mikhail Kamynin, Russia's Foreign Ministry chief spokesman. "Moreover, in London they should clearly realize that such provocative actions masterminded by the British authorities will not be left without an answer and cannot but entail the most serious consequences for Russian-British relations," he added.
He said later that Moscow would not apply for any UK visas for Russian officials.
"The position of the Brown government is not based on British common sense and reasoning," he said.
The British embassy clarified that the visa process would only change for applications submitted for members of the Russian government - not for ordinary Russians.
The UK's Foreign Secretary, David Miliband, said that Russia is an important ally and the situation was "not sought" and Britain does not welcome the turn of events.
The situation could disrupt billions of pounds worth of British business with Russia if they retaliate against British business interests in the country.
Litvinenko was a former officer in the Russian Federal Security Service (FSB) who later fled to the UK and was granted asylum and citizenship.
He tried to publish a book in Russia in which he described Vladimir Putin's rise to power as being organized by the FSB as a coup d'état. He stated that the FSB orchestrated the bombing of apartment buildings to instil fear in the public and legitimize military actions against Chechnya.
On 01 November 2006, Litvinenko suddenly fell ill and died three weeks later from lethal polonium-210 radiation poisoning under suspicious circumstances.
The prime suspect that the UK wants to extradite is another former agent, Andrei Lugovoi. He had visited several places where traces of the polonium-210 radiation were found.
Lugovoi denies involvement, stating that he is a witness, not a suspect.