A mystery Russian diplomat with a penchant for loungewear and cigarettes on Friday sparked a national security standoff between Canberra and the Kremlin, defying Australia's efforts to kick him off a messy building site near parliament.

Australia has blocked Russia from building a new embassy on a scruffy parcel of land a stone's throw from Parliament House, after intelligence officials warned that Moscow would use the site as a base to spy on lawmakers.

Last week, Australia passed laws specifically drafted to stop the development, which sits about 400 metres (0.25 miles) away from the parliamentary precinct. 

Since then, a bespectacled Russian official clad in track pants and a puffer jacket has thwarted efforts to reclaim the land, where he is squatting inside a small security shed surrounded by weeds and discarded building materials.

With an envoy firmly ensconced inside the cosy portacabin on Friday afternoon, the Russian embassy launched a last-ditch legal bid to halt his eviction. 

An Australian government spokesman said Russia was seeking an injunction at the country's highest court. 

"Russia's challenge to the validity of the law is not unexpected," he told AFP. 

"This is part of the Russian playbook."

- 'Russophobic hysteria' -

Government sources have confirmed the man has diplomatic protection, but AFP has been unable to match him with Russia's official list of representatives in Australia.

Australian police have been watching the site but the government is wary of arresting the diplomat, which could provoke Moscow into escalating an already tricky diplomatic situation.

Australian Prime Minister Anthony Albanese on Friday described the diplomat -- who has been filmed leaving the shed to smoke cigarettes -- as "some bloke standing in the cold on a blade of grass in Canberra".

This week, night-time temperatures in the Australian capital have hovered well below freezing. 

Russia bought the lease to the land from the Australian government in 2008, and in 2011 was granted approval to build its new embassy there. 

Last week, the Australian government announced it was tearing up the lease. 

"The government has received very clear security advice as to the risk posed by a new Russian presence so close to Parliament House," Albanese told reporters.

"We are acting quickly to ensure the lease site does not become a formal diplomatic presence." 

The new laws, passed with bipartisan support, do not stop Russia from having a diplomatic footprint in Australia -- only from building so close to parliament. 

A Russian diplomat last week told AFP the embassy was "seeking legal advice", while Kremlin spokesman Dmitry Peskov said it was a demonstration of "Russophobic hysteria".

Russia's foreign ministry earlier this week released a list of 48 Australians who were banned from the country for propagating an "anti-Russian agenda". 

The list included journalists, government officials, and executives from local defence companies.

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