In a scene straight out of a Cold War novel, Sweden’s navy is scouring the sea in an attempt to locate a suspected foreign submarine.

Speculation over the origin of the mystery vessel is mounting, with international relations experts floating the idea of a Russian submarine sent to spy on its Scandinavian neighbour.

The search on Monday was being extended southwards to the open sea about 70 kilometres southeast of Stockholm.

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Swedish Prime Minister Stefan Loefven said that more military exercises were being carried out in the Baltic Sea by a number of nations.

“There’s an increase in military exercises from both the Russian and the NATO side,” Prime Minister Stefan Loefven said, speaking at a press conference in Helsinki.

“There’s no reason for exaggerated concern here but obviously we are aware of what’s happening in the Baltic Sea because it’s our neighbourhood.”

As the search expanded, the military warned the public for the first time to keep a distance of at least 10km from the operation.

Since the armed forces received a tip-off about a “man-made object” on Friday, more than 200 men, several stealth ships, minesweepers and helicopters have combed the sea around islands close to the Swedish capital.

“There is no submarine hunt underway, there is an ongoing intelligence gathering operation,” Mr Loefven said.

On Sunday night the Swedish armed forces released a photo taken the same day of what it believed was a “foreign vessel” near islands about 50km east of the Swedish capital.

Speculation has been rife over the origin of the vessel, with a Swedish media report suggesting that it might be a Russian U-boat – a claim dismissed by Sweden’s military.

Russia instead pointed the finger at the Netherlands, saying that the mystery submarine may be Dutch.

That claim was met with a swift denial from the Hague, which said its submarine was “not involved”.

– with AAP