MOSCOW, September 17 (RIA Novosti) - Andrei Lugovoi, wanted in Britain over the murder of Alexander Litvinenko, has sued Russian newspaper Kommersant for an article he said portrays him as a murderer, the businessman's lawyer said Monday.

A Moscow court is expected to discuss later Monday a possible amicable settlement or to schedule hearings on the lawsuit, in which Lugovoi is demanding 20 million rubles (about $790,000) in compensation for a statement damaging his reputation, and a denial in the paper.

Lugovoi, an ex-Kremlin bodyguard, who London accuses of poisoning Litvinenko, a former FSB officer and Kremlin critic, with a fatal dose of radioactive polonium last November, took legal action over the business paper's article printed on July 9.

The paper said that "after Britain's Crown Prosecution Service accused him of murdering... Litvinenko, Lugovoi was the first to tell about his victim's ties to British intelligence services."

Lawyer Tatyana Stukalova said: "My client believes by saying that 'Lugovoi was the first to tell about his victim's ties [with British intelligence services]' ... the paper imposed its viewpoint on readers and portrayed Lugovoi as a culprit."

"We believe the article reports information that does not reflect the truth, and blemishes Lugovoi's dignity and business reputation," she said.

Russia's refusal to extradite Lugovoi to the U.K. has proved a major source of contention in relations between the countries, and in July sparked a tit-for-tat row involving expulsions of diplomats and visa restrictions.

Moscow has denied London's extradition requests citing its Constitution, which bars the extradition of Russian nationals. Russian authorities said they could try Lugovoi at home if Scotland Yard investigators provide substantiated evidence.

On Sunday Lugovoi, a millionaire businessman who owns a private security company, confirmed that he would run for parliament as a candidate for the Liberal Democratic Party, led by outspoken pro-Kremlin ultranationalist Vladimir Zhirinovsky. A seat in the State Duma would give Lugovoi immunity from prosecution under Russian law.