Russia was yesterday facing a global backlash over its threat to halt work on a $20 billion (€15.8 billion) energy project led by Royal Dutch Shell.

Japan led the chorus of anger with Shinzo Abe, chief cabinet secretary and front runner to be the next prime minister, warning that the move would damage international relations and jeopardise foreign investment.

European governments also voiced their concern with Britain saying it had protested to the Russian authorities. On Monday, Russia's natural resources ministry revoked a key environmental permit for the Sakhalin-2 project in the far east of the country.

If ratified by Russia's industrial safety agency, work on the gas and oil development would be halted. Russia insisted its move to cancel the environmental permit for Sakhalin-2 was not politically motivated.

Oleg Mitvol, deputy head of Russia's environmental watchdog, accused the project operators of serious breaches of environmental law, including marine and river pollution.

The suspension of Shell's permit has been widely seen as a tactic to secure a better stake in the project for the Russian government, a charge the authorities strongly rejected yesterday.

The move was keenly felt in Japan, where gas and oil from Sakhalin are seen as crucial to strengthen Japanese energy security and reduce its dependence on the Middle East.

Andris Piebalgs, EU energy commissioner, said that the issues should be clearly identified by the Russian authorities.