Stockholm (AFP) - The Swedish navy stepped up its hunt Monday for a suspected foreign submarine in its waters with fingers pointing at Moscow in a throwback to the Cold War.

Swedish soldiers and sailors were scouring the sea southeast of the capital Stockholm in the biggest operation of its kind for years, while the public was warned for the first time to keep a distance and airspace restrictions were enforced.

The mystery around the alleged incursion thickened Monday, with Russia and the Netherlands denying that the vessel was theirs as tensions in Baltic rise over the crisis in Ukraine.

"There's an increase in military exercises from both the Russian and the NATO side," Prime Minister Stefan Loefven said, speaking at a press conference in Helsinki.

In one of two airspace violations in September, two Russian SU-24 fighter-bombers allegedly entered Swedish airspace in what Foreign Minister Carl Bildt at the time called "the most serious aerial incursion by the Russians" in almost a decade.

The Baltic Sea, an area of immense strategic importance, saw intense naval manoeuvring throughout the Cold War years, with the Soviet Navy paying particular attention to neutral Sweden's long, rugged coastline.

In the most widely known incident of that era, a Soviet submarine ran aground in 1981 near the major naval base of Karlskrona, and was only allowed to leave after a lengthy, humiliating wait.

Even after the breakup of the Soviet Union, Sweden has continued to keep a close eye on vessels believed to be foreign submarines.

Speculation mounted Monday over the whereabouts of the elusive vessel as the armed forces extended the search area southwards to open sea about 70 kilometres (44 miles) southeast of Stockholm.

As the search expanded, the military warned the public for the first time to keep a distance of at least 10 kilometres (six miles) from the operation -- while stopping all non-essential air transport in the area.

Since the armed forces received a tip-off about a "man-made object" on Friday, stealth ships, minesweepers and helicopters have combed the sea around islands close to the Swedish capital.

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"There is no submarine hunt underway, there is an ongoing intelligence gathering operation," Loefven said in Helsinki.





- 'Many indications' it's Russian -





The search, which entered its fourth day on Monday, has triggered widespread speculation in the Swedish and foreign media that the vessel might be Russian.

Russia instead pointed the finger at the Netherlands, saying that the mystery submarine may be Dutch.

That claim was met with a swift denial from the Hague which said its submarine was "not involved", having left the area after taking part in a naval exercise with Sweden.

Tomas Ries, an expert at the Swedish National Defence College, said he had little doubt that the vessel was of Russian origin.

"There are so many indications that it would be Russian. It's very hard to imagine that any other country would send mini subs into Stockholm's archipelago," he said.

On Sunday night the Swedish armed forces released a photo taken the same day of what it believed was a "foreign vessel" near islands about 50 kilometres (30 miles) east the Swedish capital.

Ries said that the ongoing incident was different from recent airspace violations by Russian jets, which he called "very visible signals -- part of a diplomatic exchange".

"This seems to be something that they really wanted to keep secret, an operation that they were carrying out and trying to do clandestinely... deep inside Swedish waters," he said.

With concern growing about the possibility of an unravelling of the European security order in the aftermath of the Ukraine crisis, events in Sweden racked up tensions around the Baltic.

Latvian Foreign Minister Edgars Rinkevics said on Twitter that he was following events in the Swedish territorial waters closely.

"(It) may become a game changer of the security in the whole Baltic Sea region," he tweeted on Sunday.