As Peter Mandelson prepares to be ennobled today and re-enter the Cabinet after his two enforced departures, questions are being asked about the extent of his relationship with Russia’s richest man.

In his first week back in British politics, Mr Mandelson has avoided offering a clear account about his contact with Oleg Deripaska, the Russian aluminium oligarch, at a social gathering in Corfu this summer.

Asked ten days ago about the gathering, Mr Mandelson’s spokespeople in London and Brussels said that the former European Trade Commissioner only had drinks with Mr Deripaska aboard the Russian’s £80 million superyacht, the Queen K.

Mr Mandelson then told The Times that he had last seen Mr Deripaska at a dinner hosted by Rupert Murdoch in Corfu. However, well-placed sources insist that Mr Mandelson, who will become Lord Mandelson of Foy and Hartlepool today, was actually staying on board the Queen K.

He told other guests that he had been “billeted” on the yacht because Nat Rothschild, the financier, had run out of room in his five homes on the island.

Other sources have said that Mr Mandelson has also visited Mr Deripaska, who had an estimated fortune of £16 billion before the recent stock market turmoil, at home in Russia.

Concern over the extent of the acquaintance has arisen because of a potential conflict of interest between Mr Mandelson, who was the European Trade Commissioner until last week, and Mr Deripaska.

While he was Commissioner, Mr Mandelson promoted a plan to reduce EU tariffs on imported raw aluminium. After a vote by the European Council, the tariff was reduced last year from 6 per cent to 3 per cent, and mechanisms are in place to remove the tax completely from next year.

Mr Deripaska’s company, Rusal, the world’s largest aluminium producer, is a leading exporter to Europe, selling about one million tonnes within the trading bloc each year. At current aluminium prices the reduction will save Mr Rusal about £117 million a year.

Alan Duncan, the Shadow Business Secretary, said: “Now that Peter Mandelson is back in the Cabinet we need to see the track record of any associations and links that he might have had as a commissioner.”

Mr Mandelson’s friendships with the rich and famous has caused him problems before. He was forced to resign from the Cabinet in 1998 after receiving a £373,000 interest-free loan from Geoffrey Robinson, who at the time was Paymaster General.

He resigned again in 2001 after allegations surfaced that he had helped to get Srichand Hinduja, the Indian businessman, a British passport, although he was cleared of any wrongdoing by an official inquiry.

Mr Mandelson’s acquaintance with Mr Deripaska goes back two years, and he has said that they have met socially numerous times.

EU rules say that commissioners should avoid potential conflicts of interest. Mr Mandelson denied yesterday that there had been a conflict of interest and insisted that he had never discussed aluminium tariffs with Mr Deripaska. He told The Times: “The tariffs are determined by the EU member states, not by me, and the member states are going to be governed not by their desire to please a Russian businessman but by what is in their interests and those of their businesses.

“I am satisfied that I have never been presented with any conflicts of interest among those I have met. If you take the example of Mr Deripaska, a man I last met at dinner with Rupert Murdoch at a birthday party with his daughter, he did not at that occasion or any previous occasion ever raise the issue of aluminium duties and nor would I expect him to do so.”

A spokesman for Mr Deripaska said: “Mr Deripaska does not comment on his private meetings.”

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