Month on, police baffled by murder of ex-Russian spy

LONDON, Dec 22 (Reuters) A month after the death of former Russian spy Alexander Litvinenko, hard facts are in short supply, lurid theories abound and even his close associates are divided over the motive for his murder.

In the most chilling and macabre spy case since the Cold War, the future of British-Russian relations could hinge on the outcome of a Scotland Yard investigation into Litvinenko's lingering death in London from radiation poisoning.

''It's making progress, but it's a fairly complicated inquiry, and it's ongoing,'' a police spokesman said today, declining further comment.

The latest theory -- that Litvinenko was murdered because he had produced a highly damaging dossier on a close associate of President Vladimir Putin -- was aired by the dead man's business partner Yuri Shvets, who has shared his suspicions with police.

Shvets told the BBC the research was commissioned by a British company and led to the cancellation of a multi-million-dollar deal involving the unnamed Putin ally.

But Litvinenko's friend and neighbour, Chechen exile Akhmed Zakayev, told Reuters this week he was not aware of any such dossier or investigation.

''I'm not sure Litvinenko was conducting a particular case. He was conducting a general case against the FSB (security service) and the Kremlin regime. I don't believe there was any special commission for, or from, someone,'' he told Reuters.

''I'm doubtful of Shvets' version ... As for the business projects that are being mentioned now, Alexander never told me anything about them.'' DEATHBED ACCUSATION A source close to Shvets declined to name the Putin associate who was the subject of the alleged dossier, although he did rule out two senior Kremlin figures with backgrounds in the security services.

''It's not Igor Sechin and it's not Sergei Ivanov,'' he said, referring to Putin's deputy chief of staff and defence minister.

Litvinenko, a former agent who became an outspoken Kremlin critic, composed a dramatic deathbed statement in which he blamed his poisoning on Putin.

Moscow has said the charge is ridiculous and described Litvinenko as an obscure, low-level figure who never had access to important information.

Among the many unanswered questions is why Litvinenko was killed in such gruesome fashion with the rare and expensive radioactive isotope polonium 210, when a mundane shooting or a fake road accident could have dispatched him more discreetly.

Polonium traces have been discovered at sites visited by two Russian business associates of Litvinenko in London and Hamburg in late October, and on planes which one of them flew between Moscow and London that month.

The men, Andrei Lugovoy and Dmitry Kovtun, also met Litvinenko at London's Millennium Hotel on November 1, the day he fell ill.

adiation traces were found at the hotel bar where they met, and eight staff members there have tested positive for low levels of polonium.

The two men, both former KGB officers, strongly deny involvement in Litvinenko's death. Kovtun has been quoted as saying he may have picked up the contamination from an earlier meeting with him in London between October 16 and 18.

A police source told Reuters this week it was likely that Scotland Yard would send a report early next year to prosecutors, who would then have to decide whether to bring a case. But with Moscow making clear it will not extradite any suspects to Britain, prospects for a trial are at best unclear.

Reuters SP DB1847