The treaty allows arms companies to buy kit from Russia – and Russian diplomatic sources said they hope one day to see British soldiers carrying the Red Army’s famous Kalashnikov rifle as a result.

British Ministry of Defence (MOD) sources confirmed the deal creates the legal framework for the British Army to buy Russian equipment, but stressed their main focus is on allowing firms to share information and buy components from one another.

The British MoD and the Russian Federal Service for Military Technical Co-operation are now studying the draft text. It could be signed in the spring, Moscow sources said, earlier than previously thought after making quick progress.

The deal covers ‘unclassified’ technology, so it is unlikely to allow co-operation on advanced battlefield equipment such as missile systems.

President Putin wants to dramatically boost Russia’s arms exports to compete with the European defence industry. He has also announced a radical expansion in military spending in order to overhaul an army and navy that are reliant on hopelessly outdated weapons from the Soviet era. The deal means that British factories are in line to benefit from those orders.

The Russian authorities are keen for a closer business relationship with Britain. Only 600 British firms currently trade in Russia, compared to 7000 German.