Moscow: Security services believe there are around 40 Russian spies operating in Britain, as they did during the Cold War.
According to The Telegraph, it is believed these spies are monitoring London-based oligarchs, or are engaged in industrial spying for commercial benefit to Russian firms.
A senior source told the paper that approximately 50 percent of the Russian embassy staff in London might be involved in intelligence gathering.
There are fears that Russia could take advantage of the Olympics and the Queen`s Diamond Jubilee celebrations to increase its spying network.
Oleg Gordievsky, a high-profile KGB defector, has warned that the number of spies operating in the UK could be greater than what there was in the mid-1980s.
Britain`s close relationship with America has always attracted Russia. A Russia expert at the respected security think-tank, the Royal United Services Institute (Rusi), Jonathan Eyal, said the UK has always been of interest to Russia as it is seen as a potential back door entry to US intelligence.
Relations between the two nations have been strained in recent years, particularly after the murder of Alexander Litvinenko in London in 2006, and difficulties in extraditing the chief suspect Andrei Lugovoi.