Russia has agreed a deal to build an electronic intelligence-gathering base in Nicaragua, which will no doubt renew fears of a new Cold War.

The deal between Moscow and Managua, which will also involve the sale of 50 Russian T-72 tanks, comes as President Putin's regime ramps up the pressure on Nato in eastern Europe.

Russia said it would be deploying nuclear-capable missiles in the Kaliningrad enclave, close to the Polish border, by 2019 and may even site them in newly annexed Crimea.

Russian President Vladimir Putin is pictured meeting his Nicaraguan counterpart, Daniel Ortega, who has led the left-wing Sandinistas for more than 30 years

Putin has refused to back down after economic sanctions were imposed on Russia following the annexation of Crimea and has ramped up its military facilities around the world.

Nicaragua's leftist President Daniel Ortega was once the bete noire of the White House.

His Sandinista regime were targeted for a decade in the 1980s by President Ronald Reagan and Ortega has remained friendly with Moscow since the collapse of the Soviet Union.

Last week three Americans, working for the US Department of Homeland Security, were expelled from Nicaragua without explanation.

Washington complained about the explusion which they said was 'unwarranted and inconsistent with the positive and constructive agenda that we seek with the government of Nicaragua'.

After more than a decade out of power Ortega was re-elected in 2006 and has tried to reintroduce socialist policies.

He has also announced plans for a huge canal, to rival the Panama Canal, which would be funded by a Chinese consortium.

President Ortega and his wife Rosario Murillo (right) welcomed President Putin to Nicaragua in 2014 and the relationship between Moscow and Managua remains warm

Russia and Nicaragua signed a deal last year to build a GPS base near Laguna de Najapa, on the outskirts of the capital Managua, and the Washington Free Beacon said that may be the same site they would use for the spy base.

Other reports said the base would be located on the Caribbean coast.

A US State Department official said: 'While any nation has the right to choose its international partners, we have been clear that now is not the time for business as usual with Russia.'

Costa Rica's Foreign Minister Manuel Gonzalez has criticised the tank sale, telling the La Prensa newspaper: 'It is a matter of concern not because of a threat to Costa Rica…but because one country in the Central American region starts an arms race.'

A quarter of a century after the end of the Cold War a new arms race is under way in eastern Europe with Poland and the Baltic states having switched sides and the Kaliningrad enclave could be crucial