Russia's political establishment, including MPs, government ministers, leaders of major political parties, and Kremlin-connected political analysts, have all warned of the risk of war involving Moscow and its former imperial vassal Georgia. They believe that Mikhail Saakashvili, the Georgian president, is trying to provoke a conflict in order to rid his country of Russian influence once and for all. More specifically, they charge that he engineered a recent spy scandal between the two countries in order to heighten tension.

Georgia arrested four Russian military officers 11 days ago and accused them of espionage, before releasing them on Monday of this week. Georgia claimed they had been complicit in "terrorist acts" and alleged that the men had recruited a local spy network with the aim of destabilising the country's pro-Western government.

Sergei Mironov, the chairman of Russia's Federation Council and a close ally of Russian president Vladimir Putin, said that the incident looked to be the prelude to some kind of attack on pro-Russian forces based in Georgia. "There are several examples in history when bouts of increased spy mania of the kind we are seeing in Georgia became one of the stages of preparations by a state to unleash combat hostilities." The Kremlin called the spying allegations "outrageous" with Putin accusing Tbilisi of "state terrorism" and "hostage-taking".

Rhetoric aside, how have relations deteriorated?

Russia has severed all land, sea, air, and postal links with Georgia. Moscow has stopped issuing visas to Georgian nationals, and the Duma is to consider preventing Georgians working in Russia from sending their earnings back home.

The Kremlin estimates that the Georgian diaspora sends back $1bn every year, making a significant contribution to Tbilisi's budget.

Russia has also banned the import of Georgian wine and mineral water, and at the beginning of this year, briefly cut gas and power supplies. In the last few days, businesses owned by ethnic Georgians in Russia have allegedly been raided by police, with two casinos shut down in Moscow and Georgians subjected to increased document checks. Russia has also recalled its ambassador from Tbilisi, effectively severing diplomatic ties .

Saakashvili, meanwhile, alleges that proRussian forces are targeting helicopters carrying his ministers with surface-to-air missiles, a charge Moscow denies. Georgia has also vowed to block Russia's bid to join the World Trade Organisation until the sanctions are lifted.

What is Georgia's side of the story?

Georgia believes a resurgent Russia is in imperialist mood and cannot bear to see a former part of the Russian and Soviet empire go its own pro-Western way. Georgia hopes to join both Nato and the EU, and has steadily moved closer to Washington.

Saakashvili, who swept to power in the so-called 'Rose Revolution' in 2003, is a USeducated lawyer with a florid turn of phrase who openly accuses Russia of bullying his small mountainous nation. He says Georgia will never be truly free until it rids itself of a Russian military presence.

Some 4,000 Russian troops are garrisoned in two bases on Georgian soil as a hangover from the Soviet era, and are due to withdraw in 2008. A further 2,500 Russian troops are deployed as "peacekeepers" in two pro-Russian breakaway regions.

Saakashvili wants those troops to be replaced by international peacekeepers.

He also wants the two regions, South Ossetia and Abkhazia, to become part of Georgia proper and accuses the Kremlin of packing them with ethnic Russians to ensure they remain loyal to Moscow. He believes that Russia's aim in doing so is to keep his country weak and divided.

And Russia's?

The Kremlin believes that Saakashvili is little more than a US puppet with vehemently anti-Russian views. They have been angered and insulted by his increasingly bold statements about the need to downgrade Georgia's relationship with Moscow. They preferred his predecessor, Eduard Shevardnadze, whom Saakashvili ousted in 2003, viewing him as more respectful and pliable.

Russia makes no bones about the fact that it sees Georgia as its "near abroad" and as a legitimate part of its sphere of influence. Moscow has enjoyed huge influence over life in Georgia for centuries, and doesn't see why it should surrender that influence to the United States overnight. The Kremlin views the prospect of Georgia joining Nato with horror, worrying that it is being gradually encircled by unfriendly nations which are little more than US client states.

Does the United States play any role?

Quite a big one. Washington has a major interest in ensuring that Georgia's government remains "friendly" in order to safeguard a BP oil pipeline which cuts through the country. The 1,100-mile pipeline runs from Baku in Azerbaijan through Georgia to the Turkish seaport of Ceyhan.

The United States regards it as a significant alternative source of oil to the unstable Middle East. It has therefore invested heavily in making sure Saakashvili, who speaks fluent English with an American accent, remains in power.

Georgia's army has been trained by US military advisers and dons US uniforms and equipment. US president George Bush visited Georgia in 2005, declaring Saakashvili's government "a beacon of freedom". The US gives large amounts of aid to Tbilisi, and has also been instrumental in getting Nato to consider Georgia's application for membership.

Will there be war?

It seems unlikely. In the year that it is chairing the G8 group of nations, Russia is hardly likely to want a war where it will inevitably be seen as Goliath to Georgia's David. It has the option of cutting off energy supplies, though it will not want to face accusations of being an energy bully, something it faced during a row with Ukraine earlier this year.

Georgia has also released the four Russians it believed were spies, a move that should help to defuse tension. If a conflict did break out, it would be more likely to be of the proxy variety with Russia indirectly supporting separatist forces on Georgian territory, rather than a fullblown conflict.