Britain and Russia are on Monday braced for a major diplomatic stand-off, as London formally responds to Moscow’s refusal to extradite Andrei Lugovoi, wanted by UK authorities for the murder of former KGB agent Alexander Litvinenko.

Amid intense speculation that Britain will expel Russian diplomats from London for the first time in more than a decade, David Miliband, the UK foreign secretary, is preparing to outline the action to be taken in a statement to parliament this afternoon.