Australia’s top court has rejected Russia’s bid to hold on to a plot of land in its capital, where Moscow had planned to build a new embassy.

The government in mid-June cancelled Russia’s lease on national security grounds, prompting a court challenge.

Experts said the planned embassy posed a spying risk as it would be just 400m away from the Australian parliament.

A Russian diplomat who had been squatting in protest near the site left in an embassy car after the ruling.

Russia’s existing embassy is some distance away from the federal parliament building in Canberra.

Moscow had purchased the lease for the new site in 2008, and was granted approval to build its new embassy there in 2011.

However on June 15 this year, Australia’s parliament rushed through new laws aimed specifically at terminating the lease.

In introducing the laws, Australia’s Prime Minister Anthony Albanese said intelligence agencies had given “very clear security advice as to the risk posed by a new Russian presence so close to Parliament House”.

Kremlin spokesman Dmitry Peskov has described Australia’s move to tear up the lease as another example of “Russophobic hysteria that is now going on in the countries of the collective West”.

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