By Tom Bergin and Brenda Goh
LONDON, March 6 Britain's Office for National Statistics says as many of the country's residents were born in Mauritius and Cyprus as in Russia.
The fact British newspapers haven't coined Mauritian or Cypriot equivalents to "Londongrad" and "Moscow-on-the-Thames" to describe the capital underlines the special social and economic impact Russians have had on Britain in the past decade and a half.
The importance of Russia to British businesses means the cost of imposing tough sanctions against Russia after its troops took control of Crimea could be higher than British Prime Minister David Cameron is willing to pay.
"Amidst all the calls for action on Ukraine, there will be voices cautioning on the need to look more at interests closer to home, and to weigh them in the balance" said Nicholas Redman, Senior Fellow, at the International Institute for Strategic Studies think-tank.
Soviet-born billionaires occupy three of the top five slots in The Sunday Times newspaper's Rich List, Britain's most read ranking of wealth, and are prolific buyers of trophy assets such as 100 million pound ($170 million) mansions, soccer clubs and newspapers such as London's Evening Standard.
One of London's most visible Russian oligarchs, Roman Abramovich, spent 59 million pounds to buy Chelsea Football Club in 2003 and the Daily Mail newspaper calculated last year he had spent 713 million pounds on players since then.
Abramovich bought a mansion in Kensington Palace Gardens - also known as Billionaires' Row - for 90 million pounds from hedge fund manager Pierre Lagrange in 2011.
More Russians have received special "Tier-1 investor visas", whose award is tied to investing at least 1 million pounds in British assets, than citizens of any other country since the visas were introduced in 2008, Home Office data shows.
Such links have been a boon to Britain's real estate agents, luxury goods purveyors and more importantly, its strategically important financial and professional services industries.
Some British allies including France and Poland have vocally backed economic sanctions on Russia if it does not pull back its troops from Ukraine. President Barack Obama has imposed an asset freeze and travel ban on those involved in the Russian military intervention in Crimea.
Cameron has warned Moscow it will pay "significant costs" but an official document unwittingly exposed to a photographer's lens this week suggested London opposed trade sanctions and shutting its financial capital to Russians.
The Foreign Office declined to say what role, if any, commercial interests were playing in Britain's approach to sanctions but analysts said they were a key factor.
"We've got more to lose than the Americans. [U.S. Secretary of State John] Kerry is happy to push for sanctions because it won't cost them as much," said Ruben Lee, CEO of financial markets consulting firm Oxford Finance Group.
Analysts predict that Cameron will at most back token measures such as visa restrictions on a small number of senior Russian officials, rather than bar a wider range of possibly Kremlin linked billionaires.
"When someone says 'I'm coming to see my lawyers who I pay 5 million a year to and stay in my 10 million pound house in Surrey,' are the British government really going to refuse a visa?," said Andrew Wordsworth, partner at London-based risk consultancy GPW, which has Russian clients.
Bodies responsible promoting the City, as London's financial district is known, such as the Corporation of London and the British Bankers Association, said they were unaware of any data which quantified how much London's banks, lawyers and accountants make from Russian clients.
However, Lee said the City was a fulcrum of Russia's international capital raising and, consequently, took in a big chunk of the associated fees.
When it comes to raising debt, those fees amounted to almost $300 million annually in recent years, according to Thomson Reuters data.
London has also become the location of choice for Russian companies seeking to sell shares to foreign investors. Seventy Russian companies are listed on the London Stock Exchange, spokeswoman Alexandra Ritter man said.
Overall, companies from Russia and former Soviet states have raised $82.6 billion in London in the past two decades.
The New York Stock Exchange has only two Russian companies, spokeswoman Sara Rich said, although that number excludes a handful of companies with strong Russian ties.
Britain also has a significant share of the Russian private wealth management market, according to a December report from the City Of London Corporation.
Related professionals such as accountants, consultants and lawyers have also benefited richly from Russian business in recent years. The Law Society Gazette estimated last year that as much as 60 percent of the Commercial Court's work involved parties from Russia or former Soviet countries in 2012.
"Russian disputes are big business for the London legal market," said Ben Holland, partner in the international arbitration practice of law firm Covington & Burling LLP.
The highest profile Russian legal case involved businessman Boris Berezovsky's $6 billion claim against Abramovich for damages related to a stake in oil company Signet and other assets. Berezovsky lost and was forced to pay 35 million pounds of Abramovich's costs. Total costs were over 100 million, British media said.
OPEN FOR BUSINESS
British companies are also among the most prominent investors in Russia - BP's <Bp. l> 20 percent stake in state-controlled Rosen is the largest foreign investment in the country's oil and gas industry.
But some analysts said British reluctance to impose sanctions against Kremlin interests wasn't simply related to concerns about the safety of such investments or that its banks may lose Russian clients, but fear of the broader message this might send to other customers.
London is much more of an international financial centre than New York, which can rely on a massive domestic market to drive business.
Michael Maine, co-founder Of consultancy at Z/Yen, which compiles a quarterly ranking of financial centres that London top, said the City's reputation for welcoming money from emerging markets was crucial to its business model.
British business fears that if Cameron aggressively backs action against Russia, it could spook investors from China and other increasingly important markets, who may fear they could be in the firing line in future.
"The more pressure can be brought to bear behind the scenes or via the financial markets, rather than by overt governmental intervention, the happier the UK authorities will be, because they won't want to scare off other people," said Lee.