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By Tom Bergin and Brenda Goh
LONDON, March 6 (Reuters) - Britain's Office for NationalStatistics says as many of the country's residents were born inMauritius and Cyprus as in Russia.
The fact British newspapers haven't coined Mauritian orCypriot equivalents to "Londongrad" and "Moscow-on-the-Thames"to describe the capital underlines the special social andeconomic impact Russians have had on Britain in the past decadeand a half.
The importance of Russia to British businesses means thecost of imposing tough sanctions against Russia after its troopstook control of Crimea could be higher than British PrimeMinister David Cameron is willing to pay.
"Amidst all the calls for action on Ukraine, there will bevoices cautioning on the need to look more at interests closerto home, and to weigh them in the balance" said Nicholas Redman,Senior Fellow, at the International Institute for StrategicStudies think-tank.
Soviet-born billionaires occupy three of the top five slotsin The Sunday Times newspaper's Rich List, Britain's most readranking of wealth, and are prolific buyers of trophy assets suchas 100 million pound ($170 million) mansions, soccer clubs andnewspapers such as London's Evening Standard.
One of London's most visible Russian oligarchs, RomanAbramovich, spent 59 million pounds to buy Chelsea Football Clubin 2003 and the Daily Mail newspaper calculated last year he hadspent 713 million pounds on players since then.
Abramovich bought a mansion in Kensington Palace Gardens -also known as Billionaires' Row - for 90 million pounds fromhedge fund manager Pierre Lagrange in 2011.
BRITISH ASSETS
More Russians have received special "Tier-1 investor visas",whose award is tied to investing at least 1 million pounds inBritish assets, than citizens of any other country since thevisas 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 strategicallyimportant financial and professional services industries.
Some British allies including France and Poland have vocallybacked economic sanctions on Russia if it does not pull back itstroops from Ukraine. President Barack Obama has imposed an assetfreeze and travel ban on those involved in the Russian militaryintervention in Crimea.
Cameron has warned Moscow it will pay "significant costs"but an official document unwittingly exposed to a photographer'slens this week suggested London opposed trade sanctions andshutting its financial capital to Russians.
The Foreign Office declined to say what role, if any,commercial interests were playing in Britain's approach tosanctions but analysts said they were a key factor.
"We've got more to lose than the Americans. [U.S. Secretaryof State John] Kerry is happy to push for sanctions because itwon't cost them as much," said Ruben Lee, CEO of financialmarkets consulting firm Oxford Finance Group.
Analysts predict that Cameron will at most back tokenmeasures such as visa restrictions on a small number of seniorRussian officials, rather than bar a wider range of possiblyKremlin linked billionaires.
"When someone says 'I'm coming to see my lawyers who I pay 5million a year to and stay in my 10 million pound house inSurrey,' are the British government really going to refuse avisa?," said Andrew Wordsworth, partner at London-based riskconsultancy GPW, which has Russian clients.
CITY THRIVES
Bodies responsible promoting the City, as London's financialdistrict is known, such as the Corporation of London and theBritish Bankers Association, said they were unaware of any datawhich quantified how much London's banks, lawyers andaccountants make from Russian clients.
However, Lee said the City was a fulcrum of Russia'sinternational capital raising and, consequently, took in a bigchunk of the associated fees.
When it comes to raising debt, those fees amounted to almost$300 million annually in recent years, according to ThomsonReuters data.
London has also become the location of choice for Russiancompanies seeking to sell shares to foreign investors. SeventyRussian companies are listed on the London Stock Exchange,spokeswoman Alexandra Ritter man said.
Overall, companies from Russia and former Soviet states haveraised $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 ahandful of companies with strong Russian ties.
Britain also has a significant share of the Russian privatewealth management market, according to a December report fromthe City Of London Corporation.
Related professionals such as accountants, consultants andlawyers have also benefited richly from Russian business inrecent years. The Law Society Gazette estimated last year thatas much as 60 percent of the Commercial Court's work involvedparties from Russia or former Soviet countries in 2012.
"Russian disputes are big business for the London legalmarket," said Ben Holland, partner in the internationalarbitration practice of law firm Covington & Burling LLP.
The highest profile Russian legal case involved businessmanBoris Berezovsky's $6 billion claim against Abramovich fordamages related to a stake in oil company Signet and otherassets. Berezovsky lost and was forced to pay 35 million poundsof Abramovich's costs. Total costs were over 100 million,British media said.
OPEN FOR BUSINESS
British companies are also among the most prominentinvestors in Russia - BP's <Bp. l> 20 percent stake instate-controlled Rosen is the largest foreigninvestment in the country's oil and gas industry.
But some analysts said British reluctance to imposesanctions against Kremlin interests wasn't simply related toconcerns about the safety of such investments or that its banksmay lose Russian clients, but fear of the broader message thismight send to other customers.
London is much more of an international financial centrethan New York, which can rely on a massive domestic market todrive business.
Michael Maine, co-founder Of consultancy at Z/Yen, whichcompiles a quarterly ranking of financial centres that Londontop, said the City's reputation for welcoming money fromemerging markets was crucial to its business model.
British business fears that if Cameron aggressively backs action against Russia, it could spook investors from China andother increasingly important markets, who may fear they could bein the firing line in future.
"The more pressure can be brought to bear behind the scenesor via the financial markets, rather than by overt governmentalintervention, the happier the UK authorities will be, becausethey won't want to scare off other people," said Lee.
