If Finland joined NATO it would provoke a "serious crisis" with neighbouring Russia, an expert report commissioned by the government warned on Friday.
The report also said that Finland and Sweden should decide together if they want to join the transatlantic military alliance.
"Finland joining NATO with Sweden staying out would create a strategically awkward situation, leaving Finland as a strategic outpost without territorial contiguity with NATO," the analysis said.
"Membership would probably also lead to a serious crisis with Russia, for an undefined period of time."
The report was commissioned by the government of Prime Minister Juha Sipila in the face of Russia's increased military activity in the Baltic Sea area and its role in the conflict in Ukraine.
Finland -- which shares a 1,340-kilometre (830-mile) border with Russia -- was attacked by its powerful neighbour during World War II but has maintain peace relations with Moscow ever since.
NATO has remained open to the idea of Finnish membership, but so far Helsinki has been reluctant to join and has contented itself with close cooperation with the alliance.
"Finland would be more exposed and vulnerable than it currently is if Sweden alone were to join NATO," the report concluded.
Russian Foreign Minister Sergei Lavrov warned in an interview with Swedish daily Dagens Nyheter that his country would not hesitate to "react" if Sweden joined NATO.
"If military infrastructure draws close to Russian borders we will naturally take the necessary technical-military measures," Lavrov said, but did not elaborate.
Sweden has maintained a policy of strategic non-alignment since the Cold War.
Sipila said his government had to be ready to seek NATO membership if necessary, adding: "With Sweden, we have promised not to surprise each other in these matters."
Merkel says Germany ready to reinforce NATO eastern flank
Berlin (AFP) April 29, 2016 - Chancellor Angela Merkel said Friday that Germany was considering sending troops to Lithuania as part of a NATO mission to reinforce the alliance's eastern flank with Russia.
However Merkel stressed that any deployment should aim to avoid enflaming tensions with Moscow.
"We are currently reviewing how we can continue our engagement and perhaps even bolster it... in order to ensure the security of all (NATO) states, particularly in the east," she said.
Merkel was speaking to reporters after talks with Latvian Prime Minister Maris Kucinskis, and after her spokesman confirmed media reports that Berlin was considering a deployment to Lithuania.
"However I personally always stress that it is very important to us that we act within the framework of the NATO-Russia act," a 1997 agreement on post-Cold War relations.
It notably bans the permanent stationing of significant forces and equipment in former Warsaw Pact states.
Poland in particular has recently pressed NATO to establish "as permanent as possible" a presence in the former communist states once ruled from Moscow to counter a growing threat from Russia after its intervention in Ukraine.
Russia blames NATO for increasing the risk of conflict by building up its troops in eastern Europe.
The NATO-Russia Council, which has been on ice since the alliance cut practical ties with Moscow to protest the annexation of Crimea, met last week in Brussels but parted in acrimony over Ukraine and other issues.
Media reports said that the German military could take command of a force in Lithuania, one of Russia's border states, with a deployment of 150 to 250 German soldiers as well as troops from other member states.
German soldiers have already participated in NATO training missions in the Baltic states, but such a deployment would mark a significant expansion of its presence in the region.
Lithuanian Defence Minister Juozas Olekas welcomed the German proposal as "a firm step on the way of solidarity which enhances our common security".
Russia's takeover of the Crimean peninsula in early 2014 sparked fears NATO was too slow and unwieldy to meet the challenge posed by a more assertive Moscow.
Since the Ukraine conflict, NATO has established a high-speed response force complete with forward command and logistic centres in its eastern members so it can deploy much more rapidly.
Poland will host a NATO summit in July when these changes and other proposals will be formally concluded.
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