The home secretary has announced a public inquiry into who killed the former KGB spy Alexander Litvinenko by radiation poisoning in a London hotel in 2006 – a move set to anger Vladimir Putin, the president of Russia.

The inquiry will be chaired by Sir Robert Owen, a high court judge who is the current coroner in the inquest into Litvinenko's mysterious death, who has said there is material that does "establish a prima facie case as to the culpability of the Russian state". The decision, announced by Theresa May in a written statement to the House of Commons on Tuesday morning, follows pressure from Owen and Litvinenko's widow, Marina, for a public inquiry "to get to the truth behind my husband's murder" and represents a U-turn in government policy.

May had previously resisted calls for a public inquiry, admitting "international relations have been a factor in the government's decision-making". Now investigators will be able to probe whether the Russian state was behind his murder at a time when relations between London and Putin are strained in the aftermath of the downing of the Malaysia Airlines flight in Ukraine.

May said the inquiry would "identify, so far as is consistent with the Inquiries Act 2005, where responsibility for the death lies", how, when and where Litvinenko died and "make such recommendations as may seem appropriate".

She added: "The inquiry will not address the question of whether the UK authorities could or should have taken steps which would have prevented the death.

"It is more than seven years since Mr Litvinenko's death, and I very much hope that this inquiry will be of some comfort to his widow, Mrs Litvinenko."

Litvinenko died a painful death aged 43 after drinking tea laced with radioactive polonium-210 with two Russian men, one a former KGB officer, at the Millennium hotel in Grosvenor Square, central London, in November 2006. The former KGB bodyguard Andrei Lugovoi and Dmitri Kovtun have been identified as the prime suspects, but both deny any involvement and remain in Russia.

The UK Crown Prosecution Service charged Lugovoi with murder by deliberate poisoning six months after Litvinenko died and the then director of public prosecutions, Sir Ken Macdonald, said Lugovoi should be extradited from Russia to face trial for "an extraordinarily grave crime". Litvinenko's family believes he was working for MI6 at the time he died and was killed on the orders of the Kremlin. Russia denies any involvement.

Owen had previously called for a public inquiry to allow secret, sensitive government material to be examined. He stated that without the public inquiry his examination of any Russian involvement would not be possible because he would not be able to consider sensitive evidence held by the government. That material did "establish a prima facie case as to the culpability of the Russian state" in the death, he wrote. His request was rejected in July 2013.

May wrote to Owen stating: "It is true that international relations have been a factor in the government's decision-making. An inquest managed and run by an independent coroner is more readily explainable to some of our foreign partners, and the integrity of the process more readily grasped, than an inquiry, established by the government, under a chairman appointed by the government, which has the power to see government material potentially relevant to their interests, in secret."

The government at that point said it wanted to "wait and see" what a judge-led inquest found. In January this year Marina Litvinenko launched a high court case to force a public inquiry and the following month the high court ruled the Home Office had been wrong to rule out an inquiry before the outcome of an inquest.

"I am relieved and delighted with this decision," said Marina Litvinenko. "It sends a message to Sasha's murderers: no matter how strong and powerful you are, truth will win out in the end and you will be held accountable for your crimes. It has taken nearly eight years to bring those culpable to justice. I have full confidence in Sir Robert Owen and the inquiry process. I look forward to the day when the truth behind my husband's murder is revealed for the whole world to see."