"The interviews had little to do with their work and were clearly aimed at exerting undue pressure on innocent individuals," he said.
"Our paramount consideration is the well-being of our staff and I feel we cannot continue our work without significant risk to them."
In a statement to MPs, Mr Miliband expressed "anger and dismay" at Russia's actions.
We saw similar actions during the Cold War but frankly thought they had been put behind usDavid Miliband
He said the council's Russian staff had been questioned by security services on everything from the British Council's institutional status to the "health and welfare of family pets".
"We saw similar actions during the Cold War but frankly thought they had been put behind us," he told MPs.
"I think the whole House will agree such actions are reprehensible, not worthy of a great country, and contrary to the letter and spirit of the legal framework under which the British Council operates, notably international law"