Britain and Russia's tentative warming trend

President Putin is in London this week in an historic visit by a Russian leader.

When Vladimir Putin awoke this morning in the Belgian Suite of Buckingham Palace, he could be forgiven for briefly wondering where he was.

Not since 1874, when Queen Victoria was in full pomp and Tsar Alexander II was liberating serfs, has a Russian leader been invited to make an official state visit - the highest honor that Britain can bestow on a foreign leader.

For Mr. Putin, the accolade is a timely public-relations coup. The sight of the Russian tricolor's red, white and blue fluttering over the Mall as Putin lords it in an open carriage with the Queen will augment his presidential aura at a very convenient moment, with elections looming next year.

But beyond the ceremonial pleasantries, Putin's four-day stay in London will be colored by more contentious matters of geopolitics.

Anglo-Russia relations, so robust in Putin's early years in power, have darkened under the clouds of the Iraq war and the furor over nuclear proliferation in Iran. The two issues have put the once-chummy relationship between Putin and Prime Minister Tony Blair under considerable strain. Mr. Blair was the first Western leader to visit Putin after his election win three years ago, but when Blair returned to Russia in April he was openly mocked by Putin because of the failure to find Saddam Hussein or weapons of mass destruction.

Official talks here will last just 30 minutes - a piece of protocol that some view as a reciprocal snub by Blair - and Putin is in no mood for compromise.

Having resolutely opposed the war that Britain waged with the United States in Iraq, Putin is now determined not to be muscled out of the peace. He insists that pre-war contracts with Iraq signed by oil giant LukOil be upheld by the provisional authority in the country. He also wants Iraq's former debts to Moscow, thought to be worth more than $8 billion, to be repaid.

On Iran, where Russia is helping build an atomic power plant, Putin denies that Russia is helping proliferate dangerous nuclear technology and is staunchly defending Russia's economic interests.

"We are against the option of using the subject of Iran's potential nuclear program as a way of squeezing Russian companies out of the Iranian market," Putin told the BBC in a pre-visit interview.

For Blair, hosting the Russian president presents prickly problems of its own. Putin has earned a reputation in the West as a firm-but-fair reformer - a tag that sometimes seems at odds with his domestic policies, particularly where press freedoms and Chechnya are concerned.

"Putin is a multifaceted figure," says Professor Archie Brown of Oxford University. "He is undoubtedly a Westernizer, but on domestic political matters it's a mixed bag. The mass media are less free than they were and Chechnya remains a colossal problem which he doesn't seem to be anywhere close to resolving."

On Sunday the Russian government shut down the country's only remaining independent television station with a national reach - and replaced it with a sports channel.

Blair has promised to press the Chechen issue again, mindful of a decade of killing in the breakaway Russian republic that some rights groups say has claimed 100,000 lives.

But Blair has also hinted that in the post-September 11 world, Britain is now prepared to see Chechnya from the Russian point of view: as a "counterterrorist" operation. Chechen-based militants, Blair says, fought the allies in Iraq.

"I always raise the issue of Chechnya with President Putin, but I do so in a way that also recognizes this point - that as a result of terrorism coming out from extremists based in Chechnya, the Russian people have also suffered a very great deal," he told Parliament last week.

For all these political snags, Britain and Russia have many reasons - most of them economic - to gloss over the differences.

After a hiatus induced by the 1998 financial crisis, British investors are now returning to the Russian market. Total British exports jumped 10 percent last year to around £1 billion.

Oil giants BP and Shell are both lining up enormous deals worth a combined $12 billion to increase their position in the Russian energy sector. And conversely, Britain sees Russia as a major supplier of its energy import needs - primarily gas - over the coming decade, a supply blissfully free of the turbulence of the Middle East.

"We think there will be something very big in the field of economics," says one Russian diplomat based in London.

"The economics is starting to catch up with the politics, there are the Shell and BP deals, and I hope there will be something big to announce."

Russians are now pervading every strata of British society - not just the courts at Wimbledon. Estimates put the expatriate community here at some 200,000. And there are two of them that the Kremlin would dearly love to get its hands on: business tycoon Boris Berezovsky and Chechen envoy Ahmed Zakayev. Both are fighting Russian requests for extradition in the London courts. Mr Berezovsky, a former Kremlin kingmaker turned bitter adversary of Putin, is wanted for fraud in what some see as a politically-motivated charge. Zakayev is accused of 13 criminal charges for alleged "terrorist" activity in Chechnya between 1995 and 2000.

The Russian diplomat said it is unlikely that Mr Putin would press either case with Blair. The British leader's scope for judicial interventions is in any case far more limited than his Russian counterpart's.

"We play by the rules," he says. "We give British justice all the documents and materials for them to take necessary decisions. The matters will be resolved in British courts."