Mr Litvinenko died in a London hospital in November 2006
The UK is to expel four Russian diplomats in response to Moscow's refusal to extradite the prime suspect in the murder of Alexander Litvinenko.
Foreign Secretary David Miliband also said co-operation with Russia on a range of issues was under review.
Prosecutors want Andrei Lugovoi, an ex-KGB officer, to face trial in the UK. He denies involvement.
Moscow condemned the UK's position as "immoral" and said the expulsions would have "serious consequences".
But Prime Minister Gordon Brown said he had "no apologies for the action we have taken" in expelling the diplomats.
Speaking on a visit to Berlin, he said he wanted good relations with Russia but also said people would understand that when a prosecuting authority made it clear what was in the interests of justice and there was no co-operation, "then action has to be taken."
Former KGB agent Mr Litvinenko died of exposure to radioactive polonium-210 in London in November 2006.
The Foreign Office has not named the four Russian diplomats, but the BBC understands they are intelligence officers.
Mr Miliband told MPs Russia was an important ally and the situation was one that Britain had "not sought and does not welcome".
But he said it was necessary to send a "clear and proportionate signal" to Russia, about the seriousness with which Britain regarded the matter.
Russia's Foreign Ministry chief spokesman Mikhail Kamynin said: "London's position is immoral.
"Moreover, in London they should clearly realise that such provocative actions masterminded by the British authorities will not be left without an answer and cannot but entail the most serious consequences for Russian-British relations".
Mr Litvinenko's widow Marina said she was "very grateful" for the actions being taken by the British government and "proud to be a UK citizen".
Under the European Convention on Extradition 1957, the Russians have the right to refuse the extradition of a citizen.
The UK has the right to request that Mr Lugovoi be tried in Russia, but the UK's director of public prosecutions Sir Ken Macdonald, has already turned down the offer.
Mr Miliband said Moscow's refusal to extradite Mr Lugovoi had been "extremely disappointing" and said both the UN and EU had reported concerns that the law in Russia was applied selectively.
He told MPs the four diplomats would be expelled and said international agreements had been reached that would allow Mr Lugovoi to be extradited to the UK if he travelled abroad.
Mr Miliband added: "We shall review the extent of our cooperation with Russia on a range of issues, and as an initial step we have suspended visa facilitation negotiations with Russia and made other changes to visa practice."
KEY EVENTS IN CASE
1 November 2006: Alexander Litvinenko meets Andrei Lugovoi and another Russian at a London hotel
23 November 2006: Litvinenko dies in a London hospital
24 November 2006: A Litvinenko statement accuses Russian President Vladimir Putin of involvement in his death. Experts say Litvinenko was poisoned
6 December 2006: UK police say they are treating the death as murder
22 May 2007: Lugovoi should be charged with Litvinenko's murder, British prosecutors say
28 May 2007: UK makes formal request for Lugovoi's extradition from Russia
The British embassy in Moscow later said that the visa process would only change for applications submitted by the Russian government, not those from ordinary Russians.
The foreign secretary denied it was a "rush to judgment", but said: "A UK citizen has suffered a horrifying and lingering death.
"His murder put hundreds of others, residents and visitors, at risk of radiation contamination, and the UK government has a wider duty to ensure the safety of the large Russian community living in the UK."
Shadow foreign secretary William Hague said his party supported the tone and substance of the government's response.
He said the Conservatives hoped Russia would remain a key ally on issues like nuclear proliferation, the Middle East peace process, Kosovo and Iran, but that would require a "more positive and co-operative approach" from Moscow.
"An appalling crime of this nature and gravity cannot simply be overlooked," he added.
Andrei Lugovoi has denied involvement in the murder
And for the Lib Dems, Michael Moore said the government had been forced to act, because of the lack of co-operation from Moscow.
Later he added: "Today's announcement is an indication of the serious deterioration in Britain's relationship with Russia.
"The Russian authorities should be in no doubt that we expect nothing less than full co-operation over the investigation into the murder of Mr Litvinenko."
The radioactive isotope used to poison Mr Litvinenko was found in a string of places that Mr Lugovoi visited in London, but he said he was a witness, not a suspect in the case.
He has said he was made a scapegoat and the poisoning could not have happened without some involvement from the British intelligence services.
He has also claimed that MI6 had tried to recruit him, to collect information on Russian president Vladimir Putin.
The UK's director of public prosecutions has recommended that Mr Lugovoi be tried for murder by "deliberate poisoning".
Mr Lugovoi has told the BBC's Moscow bureau he has no comment about Mr Miliband's speech.
But former Soviet president Mikhail Gorbachev reportedly told Russian news agencies: "In the past in similar situations Russia has always taken decisive and adequate measures.
"In the end, both the UK and the US always understood that this approach doesn't work. This matter shouldn't be politicised."