The Russian oligarch who gave hospitality to Peter Mandelson is this weekend revealed to have been linked to the former boss of one of Russia’s most powerful criminal gangs.

A High Court judgment details the alleged social and business links between Oleg Deripaska and Anton Malevsky, a Russian mobster. Malevsky was then reputedly the head of an organised crime gang and his brother Andrei had a 10% stake in Deripaska’s company.

Deripaska insists that the arrangement with Malevsky was a protection racket that was forced upon him. But a High Court judge, Mr Justice Clarke, said in a preliminary judgment in July that he considers Deripaska may not have always told the full truth about his links to the mobster, who was killed in a freak parachute accident in 2001.

Deripaska, the richest Russian businessman in the world before the credit crunch, is unable to travel to America after his visa was withdrawn. The decision was made after a series of allegations in American courts about alleged criminality in his business. These claims are strongly denied by Deripaska, who says courts have ruled the allegations lack “factual support”.

However, the alleged involvement of a Russian mafia boss in Deripaska’s early business career is likely to raise new questions over Mandelson’s judgment in accepting his hospitality and holding a series of meetings with him.

The Sunday Times revealed two weeks ago how Mandelson had accepted hospitality on Deripaska’s yacht, the Queen K, in Corfu this summer.

Yesterday, in a letter to The Times, Mandelson admitted he had known Deripaska since 2004, despite previously suggesting they had first met in 2006.

Norman Baker, the Liberal Democrat MP, said: “Mandelson must publish all details of his meetings and make it clear where they took place and what the hospitality was. There is a vast difference between meeting someone at an office in Brussels and eating canapés and drinking champagne on an oligarch’s yacht.

“It is clearly not wise for an EU trade commissioner or British minister to be associating with someone who is banned from the US.”

Mandelson now faces further questions about all hospitality received from the tycoon. An authoritative source has said Mandelson stayed overnight on Deripaska’s yacht in August, but the business secretary still refuses to confirm or deny this.

He is also likely to face questions over whether he has discussed Deripaska’s business affairs with British officials. The Sunday Times has been told that in a discussion between Mandelson and senior figures at the British embassy in Moscow, it was said there was a “shared wish” for the oligarch to remain involved in British business. It is not known if Mandelson declared his friendship.

It is understood that Deripaska does not at present have a visa to visit the UK. This is apparently because he is anxious about being served legal papers relating to the High Court action, in which Michael Cherney, a former business partner of Deripaska, is suing him for £2 billion.

The preliminary High Court judgment relating to the case, issued in July, details the alleged links to Malevsky, who, according to both the former Russian interior minister and Interpol, was the leader of the Ismailova gang, one of Russian’s biggest criminal organisations.

In a newspaper report of the court proceedings, Deripaska claimed he was forced into the association with Malevsky. He said Malevsky provided protection for businessmen and plant managers, who were unable to “withdraw from such arrangements without serious consequences”.

According to the judgment, Deripaska told a Swiss court in February 2005 that he knew Malevsky only by name. But Malevsky’s widow insisted she and her late husband had stayed at Deripaska’s home.

Clarke said in the ruling: “Deripaska appears to have sought to hide any connection with Mr Malevsky from a Swiss investigating magistrate . . . Mrs Malevsky says that [Deripaska's claim] is completely untrue, and, in the light of her evidence, that seems likely to be so.”

A spokesman for Deripaska said the claims made in the High Court were “vexatious and utterly without merit”. He was unable to comment on the fact that, according to the High Court judgment, Deripaska himself accepted Malevsky had been part of a protection racket involving his business.

Mandelson is likely to face further questions this week about the initial account of his holiday in Corfu, a number of aspects of which have been apparently contradicted.

When first questioned about hospitality on the Queen K two weeks ago, his Brussels spokesman, Peter Power, said Mandelson had been invited on board the Queen K only for drinks. When it was pointed out that an authoritative source had told The Sunday Times Mandelson had stayed overnight on the boat, he refused to comment further on the issue.

In addition, Power insisted Mandelson had “never” discussed EU matters with Deripaska. This too was contradicted — this time on a blog by Mandelson’s former aide Ben Wegg-Prosser. Power subsequently said he had in fact been referring to only discussions held in Corfu.

Officials in Brussels insist Mandelson was not involved in any conflict of interest relating to his decisions as EU trade commissioner or his meetings with Deripaska and he will not be subject to an inquiry. Any EU decisions that benefited Deripaska were reached in “an entirely standard manner” without intervention by Mandelson, said David O’Sullivan, director-general for trade at the commission.

The business secretary is however likely to face further questions about possible conflicts of interest. Less than a month ago, Mandelson said he wanted to see “writing commitments on free trade in raw materials” in bilateral trade agreements. The EU strategy reflected his belief in free trade, but is likely to benefit Deripaska’s aluminium empire.

MPs will also scrutinise his current role for any possible conflicts of interest. The minister, who was ennobled this month, sits on Gordon Brown’s newly formed National Economic Council, and if it discussed the liabilities of Royal Bank of Scotland (RBS), he may have to declare his links to Deripaska. The oligarch, who has been badly affected by the credit crisis, is reported to be trying to refinance a $4.5 billion loan from a group of western banks, which includes RBS.

A spokesman for Mandelson’s department said he was unable to comment on any discussion the minister might have had with embassy officials in Moscow. He added that Mandelson would comply at all times with the ministerial code.

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