Britain has for the first time admitted it was spying when Russia's state security service, the FSB, accused British diplomats of using a transceiver hidden inside a rock on a Moscow street.

Footage showing the alleged spies using the device was aired on Russian TV in January 2006. The FSB described it as "absolutely new spy technology."

The UK Foreign Office then denied the claims.

But in a BBC documentary due to be broadcast later today, Jonathan Powell, then Prime Minister Tony Blair's chief of staff, admitted the footage was genuine.

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© RIA NovostiRussia first made the allegations in 2006
"The spy rock was embarrassing," Powell said, adding that the Russians "had us bang to rights."

"Clearly they had known about it for some time and they had been saving it up for a political purpose," he said.

That purpose was to justify the adoption of a controversial new law giving the authorities increased powers to monitor the activities and finances of non-governmental organizations, the documentary alleges.

Then President Vladimir Putin said NGOs were being used as a cover by foreign spies and argued that the measure was necessary for state security but critics said it cracked down on human rights and democracy.