36 satellites owned by British taxpayer-backed communications firm, OneWeb, have become embroiled in the Russia-Ukraine conflict.

The satellites were supposed to be launched from Russian-controlled Baikonur Cosmodrome in Kazakhstan by state-controlled space agency, Roscosmos. As well removing British flags from the launch rocket, the company refuses to proceed unless the UK sells its stake in OneWeb and Roscosmos receive assurances that the satellites won’t be used for military purposes.

The move by Russia throws not only this launch, which was intended for Saturday, but all of the company’s launches this year – five in total – into doubt.

More broadly, it puts OneWeb’s ambitions to deliver a spacebourne internet network by the end of the year that could challenge Elon Musk’s Starlink in serious jeopardy.

In a statement on Twitter, Roscosmos said: “[We] demand guarantees [for] OneWeb satellites not to be used for military purposes.

“Because of Britain’s hostile stance against Russia, another condition for the March 5 launch is that the British government withdraws from OneWeb.”

When speaking about covering up flags on the launch rocket, Dmitry Rogozin, director-general of Roscosmos, said: “The launchers at Baikonur decided that without the flags of some countries, our rocket would look more beautiful.”

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The Government spent $500m rescuing US and UK-based OneWeb in 2020 in a joint deal with Indian telecoms company Bharti.

In response to Roscosmos’ refusal to launch the company’s satellites, Kwasi Kwarteng, the Business Secretary, said: “There’s no negotiation on OneWeb: the UK Government is not selling its share. We are in touch with other shareholders to discuss next steps.”

The main functionality of OneWeb launches is to eventually provide internet for rural areas but the company hasn’t ruled out military applications in the future.

In response to Business Secretary Kwarteng’s rejection of Russian demands, the director general of Roscosmos said: “OK. I give you two days to think. There will be no guarantees of non-military use of the system – [then] there will be no system.”

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