The media carnival ballooned when Russia dragged Estonia into the debacle: According to the Russian Federal Security Service (FSB), the Russian national arrested for suspicion of spying for Great Britain had been based in the capital of Tallinn.
Not only was the spy based in the Estonian capital, said FSB spokesman Alexander Zdanovich, but was helped by Estonia's own security services to spy on Russia for Britain, according to a Reuters report.
A criminal case has been opened against the alleged spy, who is currently being held in Lefortovo jail in Moscow, said the report.
The Estonian Security Police Board, the Estonian government and the Ministry of Foreign Affairs have all refused to comment.
The Russian Embassy in Tallinn also said it was too early yet to comment.
No details of the arrest have been released, except the Russian Izvestiya newspaper wrote that the arrest was made possible partly through the publication last year of a list of British agents abroad known as the Tomlinson list.
Izvestiya quoted sources as saying that Russia's acting President Vladimir Putin, himself a former intelligence agent, probably gave FSB chief Nikolai Patrushev permission to capture the alleged spy.
In subsequent international reports, including The Times of London, Estonia was described as a natural partner for Western intelligence services as the closest of the three Baltic republics to a major Russian city. Moscow-based intelligence expert Aleksandr Shaturkin told The Times that Estonia's counter-intelligence service has also received technical equipment from its British counterpart.
"It is no secret that relations between Moscow and Tallinn are far from ideal and the latest events are unlikely to improve them," Reuters quoted the Moscow daily Kommersant as saying. "Official documents show that for Estonia, Russia is the main potential threat," the daily Nezavisimaya Gazeta said. "Gathering information on their neighbors is therefore the principal mission of the Estonian intelligence services."
While a recent survey commissioned by Eesti Paevaleht indicated that four out of five Estonians indeed fear Russia is a threat to their country's independence, some Estonians have said the Baltic country's alleged role in the spy row was Russian propaganda, put out conveniently just before presidential elections.
Enn Tarto, head of the parliamentary committee on supervising special services, regarded the accusations as a Russian tactical maneuver to divert attention from the Chechnya war.
Tarto, a well-known dissident in Estonia who spent 14 years in Soviet prison camps, said the row would not change the country's already-damaged relations with Russia, which, he said, "tries to influence Estonia economically, politically and socially to replace the country's Western orientation with an Eastern one."
"This is not the first time when Russia has tried to hold Estonia in a negative light, just as they are doing to Latvia and Lithuania," said Tarto. "It's one of their tricks. . .We won't believe it before we have seen the evidence." Tarto explained Parliament will not take the claims seriously until the legal procedures in Russia are complete.
Sergei Ivanov, Russian MP of the United People's Party, seemed nonplussed by the controversy.
"I don't know what this all means. All countries play these games. This is mainly between the big countries: Russia and Britain," he said, laughing.
Pro Patria Union MP Andres Herkel suggested that dwelling on spying allegations was a waste of time.
"I am very, very worried about the political situation in Russia," he said. "The [Chechnya] war comes first."
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