UPDATE 2-Britain, Russia urge thaw after deep freeze in ties

* UK Foreign Secretary Hague meets counterpart Lavrov

* Countries take more conciliatory tone

* Relations strained by London killing of emigre Litvinenko

(Adds comments from Hague, Lavrov)

By Conor Humphries

MOSCOW, Oct 13 (BestGrowthStock) – Britain and Russia said on
Wednesday they hoped for a thaw in frosty relations despite
persistent disagreement over the murder of a Kremlin critic in
London with a rare radioactive isotope.

Ties between the two countries fell to a post-Cold War low
after Moscow refused to extradite the man Britain wants to put
on trial for the 2006 murder of former Russian agent Alexander
Litvinenko using the highly toxic polonium-210 isotope.

British Foreign Secretary William Hague stressed there would
be no compromise over the issue but struck a conciliatory tone
at talks with his Russian counterpart, Sergei Lavrov.

“We are not saying today that we have abolished all the
differences between the governments of the United Kingdom and
Russia,” Hague said at a briefing with Lavrov after talks in a
19th century neo-gothic mansion in Moscow.

“There is clearly a lot of progress we could make,” said
Hague, who also met with President Dmitry Medvedev.

He said cooperation could widen on such issues as seeking
peace and stability in Afghanistan, reining in Iran’s nuclear
programme and efforts to prevent nuclear proliferation.

Lavrov, who said he had accepted Hague’s invitation to visit
London in 2011, also stressed that differences should not
prevent cooperation.

“I would like to underline again, we are two normal
countries with normal governments and we are interested in the
pragmatic discussion of all issues, including those where our
positions are not in line,” Lavrov said.

“We do not see the problems that remain as obstacles to
everything else,” he said.

NO PUBLIC SPARRING

Lavrov, a close ally of Russia’s paramount leader Vladimir
Putin, avoided some of the public sparring which characterised
the visit of Hague’s predecessor to Moscow last November.

The row over Litvinenko led London and Moscow to expel
diplomats three years ago. Hague said Britain, which wants to
try former KGB bodyguard Andrei Lugovoy for the murder, had not
changed its stance.

“We are not here today to announce any change in that
position,” Hague said.

Lugovoy has denied any link to Litvinenko’s killing and
Moscow has ruled out his extradition, citing its constitution.

Even before the murder, anger over mutual espionage
accusations and Britain’s granting of political asylum to some
of the Kremlin’s enemies had overshadowed a lucrative business
and trade relationship.

British companies accounted for $19.4 billion of the $262.6
billion foreign investment Russia has attracted since the 1991
fall of the Soviet Union, making Britain the fifth largest
investor after Cyprus, the Netherlands, Luxembourg and Germany.

Over 1,000 British businesses have a base in Russia, the
largest investor being oil company BP through its TNK-BP joint
venture. For Russian companies, London is the traditional venue
for selling billions of dollars of stocks and bonds.

The public tone during Hague’s visit contrasted with the
atmosphere under his predecessor David Miliband, who had a
stormy relationship with Russian officials.

Medvedev and British Prime Minister David Cameron pledged to
work on improving ties during their first meeting on the
sidelines of the Group of Eight summit in Canada in June.

“We should be able to acknowledge where differences remain
and apply our minds to them through dialogue and diplomacy,”
Hague said on Wednesday.
(Writing by Guy Faulconbridge, additional reporting by Keith
Weir in London, Alexei Anishchuk and Steve Gutterman in Moscow,
editing by Sonya Hepinstall)

UPDATE 2-Britain, Russia urge thaw after deep freeze in ties