MOSCOW, August 20 (RIA Novosti) - A Russian arbitration court has upheld the British Council's case against tax authorities, saying the majority of the $6.6-million tax claims were unjustified, Russia's Kommersant daily said on Thursday.

"This is a major victory for the British Council in its 18 months of court battles with the Russian tax authorities," the paper said.

Kommersant said the British embassy's cultural arm could resume operations in full in Russia, suspended last January in the midst of a major diplomatic fallout between Moscow and London, following the favorable court ruling.

"For the first time a court found tax claims to the tune of 200 million rubles, out of 210 million appealed against by the Council, unjustified," the paper said, citing the Ninth Arbitration Court's August 12 ruling.

Tax authorities have declined to comment on the ruling, the daily said. The British Council has confirmed the decision, saying it is currently being discussed with lawyers.

A Russian expert on NGOs welcomed the ruling, but said the parties still needed to agree on the Council's legal status in Russia for the non-charity organization to be able to resume work in full.

"This is a positive court decision," Darya Miloslavskaya of the International Center for Non-Profit Law told the paper. "But the British Council will be able to resume work in full only after the two countries' authorities agree its legal status."

She suggested the negotiations could resume in light of the ruling.

Russian authorities ordered the closure of the British Council's regional branches early last year, citing tax and status violations. The move came amid a bitter extradition row that broke out following the 2006 murder of former Russian security officer Alexander Litvinenko in London.