Exclusive: As William Hague visits Moscow, former KGB officer says the UK should stop trying to extradite him and focus on improving relations with Russia

He is the man behind the most serious diplomatic falling out between Britain and Russia since the cold war. If Scotland Yard is to believed, he is also the person who put a fatal dose of radioactive polonium into Alexander Litvinenko's tea, in one of the most notorious assassinations of the modern age.

Today, Andrei Lugovoi said it was time for Britain to "move on" from Litvinenko's agonising death four years ago, and to drop attempts to extradite him to the UK. Speaking before William Hague's arrival in Russia, on his first visit to Moscow as foreign secretary, Lugovoi said he would never travel to Britain to stand trial. "The British press has trampled on my reputation. My family and I have suffered great unpleasantness. I'm not going to compromise. The only trial I'll accept is one in Russia."

The Labour government was to blame for the four-year crisis in relations between Russia and Britain, and had taken an unnecessarily aggressive attitude towards the Kremlin, he claimed.

Hague, who will meet Dmitry Medvedev, Russia's president, tomorrow has described bilateral ties under Labour as "very poor". Before his trip, he said the door was open to improved relations with Moscow.

Britain's coalition government is also keen for UK firms to gain access to Russian oil and gas fields, from which they are currently excluded.

It was unclear whether Hague would meet any of the specific concessions the Russian government has demanded. Moscow wants Britain to resume co‑operation on counter-terrorism with the federal security service (FSB), the successor to the KGB, and on the lifting of visa restrictions on Kremlin officials visiting London. David Miliband severed links with the FSB in 2007 and expelled four Russian diplomats in protest over Moscow's refusal to hand over Lugovoi for trial in the UK. The measures conveyed the Foreign Office's belief that the FSB was behind Litvinenko's murder.

Lugovoi admits meeting Litvinenko in London on 1 November 2006, the day the latter was poisoned. The meeting took place at the Millennium Hotel in London, he said, and included another business associate, Dmitry Kovtun. Lugovoi said he could not remember whether Litvinenko drank tea: "Generally he preferred Pepsi." But he scoffed at the idea that he had dissolved polonium-210 in Litvinenko's drink. Litvinenko, a former FSB officer exiled to London after criticising Vladimir Putin, died three weeks later in Barnet Hospital.

"We were all sitting round a table in front of numerous witnesses," Lugovoi said. "What, was I supposed to throw the polonium in like a basketball? Or should I have used a syringe?"

He said Scotland Yard had obtained security camera footage of the encounter, and dismissed Litvinenko as an "adventurist" on MI6's payroll who had most probably poisoned himself by accident. "He was planning some kind of provocation against Putin and Russia and got careless with the polonium," he said.

Speaking at a rustic-themed restaurant in Moscow owned by his 24-year-old daughter, Tatiana, he jokingly referred to Anna Chapman, the Russian at the centre of this summer's unprecedented spy swap between the US and Russia. "I would like to meet her. I think I will meet her," he said. "If any British film company invites me to play the role of James Bond, I'll ask her to be my Bond girl. My only demand is that I get an Aston Martin car as an honorarium."

After the scandal surrounding Litvinenko's death, Lugovoi, a former KGB officer turned businessman, was elected to Russia's parliament – a sign of strong support from Vladimir Putin, then Russia's president, and a position that gave him immunity from prosecution. He said he was enjoying his job as a member of the Duma, and planned to stand again for election next year. However, he said he missed London: "It's a city with a unique atmosphere. But I can't risk going abroad because I'm on Interpol's wanted list."

Speaking before Hague's arrival, Russia's foreign secretary, Sergei Lavrov, blamed London for the spat, and said Russia was ready to reverse its retaliatory decision in 2007 to close Russian offices of the British Council. "This work was frozen on London's initiative," he said. "We have long been prepared to unfreeze it."

The Crown Prosecution Service charged Lugovoi with Litvinenko's murder in May 2007, but British diplomats have indicated that there is unlikely to be much progress on issues relating to Litvinenko's death during Hague's trip. "Things will only change if Lugovoi is bundled on a plane back to the UK," one source said.

Lugovoi said that detectives had failed to offer any evidence in their case against him as there was not any evidence. "If they have any proof let them put it on the table. They won't do it," he said.

The solution to improved ties was for Britain to stop making "noisy and unhelpful public statements" about the Litvinenko affair, he said, and instead raise their grievances in private. "Relations between Britain and Russia have gone through several difficult patches over the past 200 years. But in life you have to look forward. I don't think there's any point in looking back."