DIAMONDS are for ever but the chance of making a quick £1.7 million profit on a single stone does not come along every day.

Now the High Court is being asked to decide what went wrong in a failed deal involving a jewel trader for Middle Eastern royalty, a racehorse-owning property developer and one of the world’s most exceptional diamonds.

The diamond is a 44.36-carat stone the size of a large quail’s egg. Experts say it is almost impossible to value because it is unique, so there are no standards by which it can be measured.

Ivor Pitt, a diamond dealer from Radlett, Hertfordshire, was offered first refusal on the South African stone. In a description more befitting F. Scott Fitzgerald’s The Diamond As Big As The Ritz or H. Rider Haggard’s King Solomon’s Mines, a court writ lodged by Mr Pitt describes the diamond as “a unique stone of surpassing beauty and excellence”.

He could not afford to buy the jewel himself although, once the purchase was complete, he hoped to resell it at twice the original price to one of his Middle Eastern or Brunei clients. To start the process, he needed a backer.

He claims that John Murrell, a British businessman who lives in La Manga on the Costa Calida, agreed to put up the money to buy the diamond in September 2002, with Mr Pitt acting as his agent.

The stone was valued at Sotheby’s, to satisfy Mr Murrell that it was unique and flawless, and a price of $3,350,000 (£1,789,000) was agreed with the unnamed sellers.

Mr Pitt, who once owned shops in Mayfair and Knightsbridge, planned to use his contacts to resell the diamond privately for at least $6,654,000 (£3,555,000) and would keep one third of the profits.

But then Mr Murrell allegedly changed his mind. The vendors, thought to be based offshore near South Africa, then pulled out of the deal.

Mr Pitt says that his share of the profits would have been $1,101,333, which is £588,000 at yesterday’s exchange rate. He is suing Mr Murrell for £728,395, which was the sterling equivalent at the time he lodged his claim, plus £55,078 interest.

A source close to Mr Pitt said that he was in his sixties and had worked as a diamond dealer for 40 years. “He acts on behalf of high-net-worth individuals. Lots of them are based in the Middle East and Brunei,” he said.

“If he comes across something exceptional he offers it to one of these people before it gets on to the market.”

Mr Murrell, who is said to own racehorses at Newmarket, was in hospital yesterday and unavailable for comment.

His son, Robert, works as a manager for his father, whom he confirmed was “interested in horses” and described as a “pretty enclosed bloke”.

The diamond was discovered in the Kimberley Mine in South Africa. It was cut into a 206-faceted stone from one that originally weighed 87 carats. It is a grade D, flawless, briolette cut — an outstanding combination of factors which experts define as “exceptional”.

Diamonds are graded on their colour from D to Z; D is the highest level and is applied to only a small fraction of the clearest stones. Few are large enough to be cut in the briolette style, which gives a diamond a multifaceted peardrop shape.

A spokeswoman for the Diamond Trading Company, owned by De Beers, said that a 44.36-carat stone was extremely rare. The nearest comparably sized famous diamond was the 69-carat Cartier stone bought for Elizabeth Taylor by Richard Burton in 1969.

“Diamonds of that size are extremely unusual and very rarely come on the market,” she said. “A grade D diamond is perfectly clear. It is the top colour and quality with no fissures or imperfections visible, even when magnified by ten times.

“Briolette is a three-dimensional faceted cut, like a peardrop. It’s pretty hefty and very rare to get a big enough stone to cut in that way.

“It’s impossible to value a diamond without seeing it but something of that size and quality would be worth what anyone was willing to pay for it.

“Most people have a quarter or a third of a carat in their engagement ring. Very few stones when polished reach even one carat.”

DIAMOND BRIGHT

• The earliest diamonds were found in the 12th century BC in India
  
• Indian and Brazilian deposits had been almost exhausted when the Eureka diamond was found in South Africa in 1866
  
• The Cullinan diamond, at 3,106 carats, is the biggest found. It came from the Premier Mine in South Africa in 1905 and was cut into nine stones, all of which are in the Crown Jewels
  
• More diamonds are now manufactured than mined

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