On his deathbed, the former Russian FSB agent accused the Kremlin specifically Russian President Vladimir Putin of being behind his killing, and his family has long demanded Russian authorities be held accountable.
The case has strained relations between the United Kingdom and Russia, which denies poisoning the former Russian agent.
Thursday's session aimed to set out the scope of a public inquest into Litvinenko's death. Judge Robert Owen said the inquest is expected to start in May.
Lawyer Ben Emmerson, representing Litvinenko's widow, Marina, alleged that at the time of his death, Litvinenko was working for Britain's MI6 spy agency and had been tasked to help Spanish intelligence investigate the Russian mafia. The U.K. probe must consider if MI6 failed to properly assess the risks before sending the agent out on his assignment, Emmerson said.
According to the lawyer, Litvinenko had been employed by MI6 for several years and frequently met with a handler from the agency known only as "Martin" in central London. Payments from both the British and Spanish intelligence agencies were made to a joint bank account held by the agent and his wife, Emmerson alleged.
Shortly before his death, Litvinenko was due to travel to Spain with former KGB bodyguard Andrey Lugovoi to provide intelligence to Spanish authorities, Emmerson told the hearing. He said he was basing his claims on information Marina Litvinenko gave to British police.
Britain has accused Lugovoi and another Russian, Dmitry Kovtun, of killing Litvinenko. Moscow has refused to hand them over, and Lugovoi has publicly denied involvement in the death. He is now a lawmaker in Russia.
Lawyer Neil Garnham, representing Britain's Home Office, told the hearing he could neither confirm nor deny whether Litvinenko was employed by British intelligence.
Meanwhile Hugh Davies, the lawyer who advises the coroner in the inquest, told the hearing that a "high-level assessment" of confidential material provided by the British government established a case for the Russian state's culpability in Litvinenko's poisoning.
The review of the material ruled out responsibility of the British government or Chechen gangs in the death, he said.
After the hearing, Marina Litvinenko widow said she was encouraged. "I appreciate all that was done today and I'm looking forward to any decision which will be taken by the coroner after today's hearing," she told reporters.
Inquests are held in Britain to determine the facts whenever someone dies unexpectedly, violently or in disputed circumstances. Inquests are meant only to determine a cause of death, so they don't apportion blame. But in Litvinenko's case every detail of the inquiry is being scrutinized for clues to the alleged involvement of Russia's secret services.
The inquest process has been delayed until now because, for a long time, officials thought there was a chance the Russians named as main suspects in the killing could be prosecuted. But last year, it became clear that the U.K. would not be able to put the two suspects on trial.
Sylvia Hui can be reached at http://twitter.com/sylviahui
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