Russia’s first and largest funder of private science has shut down after being labeled a “foreign agent” – meaning it was suspected of espionage – by the government.

Called the Dynasty Foundation, it was set up 13 years ago by Dimitry Zimin, 82, the brains behind Russia’s largest telecommunications firm, Beeline. About 435 million roubles ($7.7 million/£5 million) had been set aside for funding this year but, after falling foul of the Kremlin, Zimin has decided to stop funding the organization.

“I will not spend my own money acting under the trademark of some unknown foreign state,” he told the Interfax news agency in May.

According to Nature, being called a foreign agent “carries Soviet-era connotations of espionage,” and the label has caused an uproar among Russian scientists. The label is a result of a 2012 law, which states that any countries receiving funding from abroad are involved in "political activities." The Guardian said that the non-profit Dynasty Foundation fell foul “because Zimin’s bank accounts, which support Dynasty, are kept abroad.”

“At a meeting of the Board of the [Dynasty Foundation], July 5, 2015, it decided to liquidate the fund,” a short statement reads on the foundation’s website. Money this year had been planned to fund fellowship grants, educational projects and summer schools. Some of these help postdocs begin independent careers, such as at the Cold Spring Harbor Laboratory in Long Island, New York, opportunities Russian government programs do not provide.

More than 3,000 researchers, writers and students had signed a letter in March this year calling for the Russian Ministry of Justice to reverse its decision to label the foundation a foreign agent, but it seems to have been to no avail.

“Like many other Russian scientists, we believe that these events will have dire immediate and long-term consequences for Russia's science,” Fyodor Kondrashov of the Centre for Genomic Regulation in Spain, who organizes Dynasty-funded summer schools, said in a letter to Nature along with two colleagues.

An exact date for closure has not been announced, but it will likely leave a large hole in Russia’s science when it occurs. Existing grants that had already been allocated will still be funded and fulfilled, the foundation noted.