Russian anti-corruption campaigner Alexei Navalny has been charged with embezzlement in a case he describes as “strange and absurd”.

Federal investigators in Moscow brought charges over a timber deal in the Kirov region in which he was involved as an unofficial adviser three years ago.

The case was previously investigated and dropped by regional prosecutors.

Alexei Navalny, who was also ordered not to leave the country, suggested the new charges were aimed at discrediting him.

Supporters of the anti-corruption lawyer, who led mass protests in Moscow against Russian leader Vladimir Putin this winter, demonstrated outside the offices of the Investigative Committee (SK) in Moscow, where he was charged on Tuesday.

Under Article 160 of the Russian criminal code on “misappropriation or embezzlement”, Alexei Navalny faces between five and 10 years in prison if convicted.

Russian anti-corruption campaigner Alexei Navalny has been charged with embezzlement in a case he describes as "strange and absurd"

Reacting to news of the case, Swedish Foreign Minister Carl Bildt said on Twitter: “We should be concerned with attempts in Russia to silence fierce opposition activist Alexei @navalny.”

The case relates to a loss-making contract concluded by a state-owned timber company in Kirov, a region just west of the Ural Mountains, with another company.

The Kirov regional budget for 2009-10 suffered a loss of 1.3 million roubles ($40,000) and Alexei Navalny was investigated as he was acting at the time as an adviser to Kirov’s governor, Nikita Belykh.

The charges were announced on Tuesday by Vladimir Markin, official spokesman for the SK, a federal body set up to act as the equivalent of the FBI in Russia.

Alexei Navalny was charged under articles 160 and 33 (acting as an accomplice to a crime), Vladimir Markin told Russian news agencies.

Investigators, Vladimir Markin said, had originally sought to charge Alexei Navalny with causing “damage to property by means of deceit or abuse of trust” but they proceeded to more serious charges after reviewing the evidence.

Alexei Navalny pointed out that he had gone to the SK expecting to be charged with the lesser offence, only to find the case had been altered against him into something much more serious.

“This charge is strange and absurd,” he said after emerging from the building.

“They have completely changed the essence of the charge.”

This winter saw the biggest anti-government demonstrations in Moscow since the fall of the USSR. Protesters rallied around Alexei Navalny, who accused Vladimir Putin’s allies of rigging elections.

Since Vladimir Putin was re-elected president in March, legal action against opposition figures has increased markedly. A tough new law was passed on public order offences and tight curbs were placed on non-governmental organizations.

In recent weeks, Alexei Navalny, a lawyer by training, turned his fire on the SK’s chief, Alexander Bastrykin.

Alexander Bastrykin denied Alexei Navalny’s allegations that he had undeclared business interests in the Czech Republic.

He admitted once owning a flat there but said he had given it to his first wife. As for commercial activity, he said: “I was never in business. Business in the sense of aiming to make a profit. If they can find a single euro in profit, I’ll resign.”

Alexei Navalny vowed on Tuesday to continue his political activities despite the case against him.

“I will continue doing what I did before – nothing has changed for me,” he was quoted as saying by AFP news agency.