A Russian court has ordered an environmental group fighting for the protection of Lake Baikal to register as a "foreign agent" because it receives funding from abroad, Interfax reported Friday.

The ruling concerns a group called the Baikal Environmental Wave, which had been seeking the closure of a paper mill that had been polluting Lake Baikal for more than four decades before it was shut down last month.

A district court in Siberia's Irkutsk region on Thursday agreed with a prosecutor's request to label the group as a foreign agent despite protests from its members, the Interfax report said.

A law adopted by Russia last year requires non-governmental organisations that engage in political activity and receive funding from abroad to adopt the foreign agent tag and use it in all their publicity.

This has raised hackles among rights groups over the negative Cold War connotations of the phrase.

According to the group's website, the Baikal Environmental Wave was created in 1990 as an informal organisation grouping scientists and activists concerned about the water quality of the world's largest freshwater lake.

One of the environmental group's leaders, Marina Rikhvanova, said prosecutors argued that the group engaged in political activity because it organised a protest in defence of the lake in January, before the paper mill's closure.

"The prosecutors decided that we were putting (political) pressure on the state," Rikhvanova told Interfax.

She added that the group has received grants and donations from both Russian and foreign donors over the years.

"We provide all the required financial accounts to all of the oversight organisations," said Rikhvanova.

The Baikalsk Pulp and Paper Mill, a gigantic Soviet-era factory built in the 1960s and located on the southern tip of the Siberian lake, halted its operations last month.

Environmentalists have long battled for the closure of the crumbling plant, the main employer in the town of 13,000 people.

The plant was shut and its employees fired in 2008, but following protests, then prime minister Vladimir Putin ordered it open again in 2010, citing unemployment concerns.