Canberra (AFP) - A mystery Russian diplomat with a penchant for loungewear and cigarettes sparked a national security standoff between Canberra and the Kremlin Friday, defying Australian efforts to seize a messy construction site in the heart of the capital.

Australia has blocked Russia from building a new embassy on the parcel of land – a stone’s throw from Parliament House – after intelligence agencies warned it could be used as a base to spy on lawmakers.

Russia launched a legal bid to save the project on Friday, while also embarking on an unusual diplomatic gambit: despatching a bespectacled official to squat in a run-down portable cabin on the site.

The middle-aged man, clad in track pants and a puffer jacket, presents a prickly challenge for Australian officials, who are wary of forcibly evicting a Russian envoy.

Government sources told AFP the man has diplomatic protection, although he did not seem to appear on Russia’s public list of representatives in Australia.

The man remained inside the cabin for most of Friday, as multiple Australian police vehicles parked nearby.

But he finally emerged hooded into the frigid Canberra night to smoke a cigarette before returning to the cabin to watch TV.

Australian Prime Minister Anthony Albanese described the diplomat on Friday as “some bloke standing in the cold on a blade of grass in Canberra”.

The “bloke”, Albanese insisted, is “not a threat to our national security”.

- ‘Russophobic hysteria’ -

The Russian embassy in Australia confirmed in a statement that its “employees” were staying at the site “to ensure the safety” of a structure built to house consular services as well as construction materials.

However, the statement carried by Russian news agencies added that “information about police attempts to expel our employees is not true.” No other details were provided.

Russia bought the lease to the land from the Australian government in 2008, and in 2011 was granted approval to build its new embassy there.

But the Australian government announced last week it was tearing up the lease.

Australia’s parliament passed laws specifically aimed at stopping a Russian embassy from being built on the site, which sits about 400 metres (440 yards) away from the parliamentary precinct.

“The government has received very clear security advice as to the risk posed by a new Russian presence so close to Parliament House,” Albanese told reporters.

“We are acting quickly to ensure the lease site does not become a formal diplomatic presence.”

The new laws, passed with bipartisan support, do not stop Russia from having a diplomatic footprint in Australia – only from building so close to parliament.

An Australian government spokesman said on Friday Russia was seeking an injunction at the country’s highest court, on the grounds that the move was unconstitutional.

“Russia’s challenge to the validity of the law is not unexpected,” he told AFP.

“This is part of the Russian playbook.”

Kremlin spokesman Dmitry Peskov said last week it was a demonstration of “Russophobic hysteria”.

Russia’s foreign ministry earlier this week released a list of 48 Australians who were banned from the country for promoting an “anti-Russian agenda”.

The list included journalists, government officials, and executives from local defence companies.