UK's economic ties with Russia

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Russia is not afraid to use its gas supplies as an economic weapon.

Russia's decision to recognise the independence of Georgia's breakaway enclaves has triggered talk of a new cold war.

Top US officials have said Russia's continued military presence in Georgia could jeopardise its membership in the Group of Eight and its bid to join the World Trade Organization.

The crisis has also revealed how the UK economy might be vulnerable if tensions escalate further.

ENERGY

The UK, and Europe, are increasingly reliant on Russia for energy supplies.

The UK became a net importer of gas in 2004 as supplies in the North Sea dwindled and Russia is a major source of our imports.

Russian energy giant Gazprom controls much of the country's oil and gas interests - supplying a fifth of the EU's overall gas needs.

Russia has not been afraid to use its gas as an economic weapon on the international stage. It cut supplies to Ukraine in March in a row over $1.5bn in unpaid debts.

THE CITY

The UK's financial sector has benefitted from the boom in Russia's economy spurred by high oil and commodity prices.

London has emerged as the favoured place for Russian companies to go public - this has meant plenty of work for City bankers and lawyers.

The luxury property market has also been underpinned by sales to Russian billionaires, whose wives are regulars at the capital's swanky department stores.

By some estimates, top London store sales to Russian tourists have been rising at 40% a year.

COMPANIES

UK firms are among the biggest investors in Russia, particularly in the oil and gas sector.

But the Russian government has become increasingly sensitive to foreign ownership of this key sector of the economy.

Both BP and Shell have been involved in conflict with the Russian government over their investments in Russia.

Shell has had to abandon its gas field developments on Sakhalin island after a dispute over environmental laws.

BP has faced lawsuits, visa rows and industrial spying claims in its dispute with four Russian billionaires over control of its TNK-BP joint oil venture.

TNK-BP's American chief executive Robert Dudley has been forced to leave Russia because of "sustained harassment".

BP was also forced to temporarily close a pipeline that runs through Georgia as a precautionary measure after Russian planes reportedly targeted it. The pipeline was designed to bypass dependence on Russia or Iran as a means of transporting oil from the Caspian Sea.

But analysts say that Russia's huge stash of foreign exchange reserves would allow it to cope if foreign investment was withdrawn from the country.