Sweden has reportedly deployed helicopters, minesweepers and approximately 200 service personnel to search for suspicious foreign underwater activity off the Stockholm coast.
Royal Swedish Navy rear admiral Anders Grenstad was quoted by the Wall Street Journal as saying: "The armed forces observes that it’s likely that foreign underwater activity is going on in the Stockholm archipelago. We haven’t pointed at Russia.
"We have said it’s foreign underwater activity, and until we have caught something or get photo evidence, it will continue to be foreign underwater activity until we know what nation it is."
The activity, which was first reported on Friday, is expected to be a submarine, a mini-submarine or divers, perhaps with some sort of underwater vehicle.
Swedish newspaper Svenska Dagbladet reported information of a damaged Russian submarine and also that Swedish military intelligence had captured radio signals between a region off the Stockholm coast and the Russian exclave of Kaliningrad.
Denying reports of submarine involvement, the Russian defence ministry issued a statement saying: "There have been no irregular situations and, even less so, accidents involving Russian naval vessels."
In response to the news report, Swedish Armed Forces communication and public affairs director Erik Lagersten said: "The Swedish Armed Forces are not in a position to deny or verify media news or speculations recently published about a missing foreign submarine.
"At the moment we are conducting an intelligence operation in the archipelago of Stockholm with optical reconnaissance, as well as with naval vessels equipped with qualified underwater sensors."
During recent months Sweden has seen a rise in Baltic Sea manoeuvres by the Russian Air Force, with two SU-24 fighter-bombers entering Swedish airspace in September.