DAVID Linley, the Queen’s nephew, is in talks with a Russian oligarch known as “the cashier to the Kremlin” about selling a multi-million-pound stake in his bespoke furniture and interiors business.

His potential partner is Sergei Pugachev, who is worth an estimated £3.5 billion and has close ties to President Vladimir Putin. A deal would ease his entrée to British high society, as he snaps up a clutch of luxury brands in western Europe.

For Linley, a working royal for the past quarter of a century, a deal with the oligarch would enable him to expand a business that already stretches to upholstery, yacht design and interior decoration.

It would also deepen the ties between members of the royal family and the Russian super-rich. Prince Michael of Kent has enjoyed trips to Russia sponsored by entrepreneurs and has looked at the possibility of entering the Russian vodka trade with a brand called Ivan the Terrible. He has set up a charitable foundation with some of the country’s richest oligarchs.

Pugachev, 44, who made his fortune through shipyards and property deals, has cemented his relationship with Linley over the past six months. Last September he took him on a bear-hunting expedition in the southern Siberian republic of Tuva, where he is a senator and has mining interests.

The two men spent a long weekend at a hunting camp on the Yenessei River, although they failed to kill any bears. Putin was photographed fishing there last August, stripped to the waist.

Pugachev, who with his well-groomed beard and grey eyes bears a resemblance to one of the last Romanov tsars, then invited Linley to a function at the Elysée Palace in Paris last September. Linley reciprocated by inviting the Russian for a pheasant shoot in Windsor Great Park last December.

The Russian owns a chateau near Nice and two villas in the jet-set playground of St Jean Cap Ferrat. Linley owns a nearby property with 600 acres.

“It is a very close relationship,” said David Henderson-Stewart, head of Pugachev’s Lux-advor company, which oversees his luxury brands. “They see each other quite often.”

Christina Macmillan, spokeswoman for Linley, said an announcement was “imminent”. She added: “There are general discussions underway at present, although they have not reached a final conclusion yet.”

The last available accounts - for 2005 - show a substantial loss for Linley’s firm, but Macmillan put this down to the costs of opening a new shop in Mayfair and said the company would shortly announce a return to profit.

In the past 18 months Pugachev has acquired a series of luxury brands including the French delicatessen chain Hediard, for which he paid a rumoured £750m, and the Russian watchmakers Poljot. In 2006 he also bought Luxe TV, which transmits in Britain, western Europe, Asia and Russia.

Linley’s company would fit logically into Pugachev’s stable of companies. Founded in 1985, it has built up an exclusive client base, working for celebrity names such as Oprah Winfrey, Carolina Herrera, Jo Malone and David Tang, and designers such as David Easton, Kelly Hoppen, Joanna Wood and Nina Campbell.

It has refurbished suites at Claridge’s, yachts and the restaurant at the Goring Hotel. His product range has included wooden paper clips, rosewood humidors, ponyskin desk tidies and dining-room tables costing more than £50,000.

Since 2006 Linley has combined his role at the furniture business with the full-time post of chairman of the auction house Christie’s UK, which raised £14m from the sale of the personal effects of his mother, Princess Margaret. In a recent interview he suggested that he was able to combine both roles. It is not known whether a sale to Pugachev would lead him to scale down his involvement in his own business.

Pugachev’s recent property deals in Russia have been controversial. He is creating a complex including a hotel, apartments and an auction house facing onto Red Square in Moscow on the former site of the defence ministry. Reports at the time, denied by Pugachev, suggested that no permits had been sought, despite it being part of a Unesco world heritage site. There are unconfirmed rumours that Linley may be asked to create interior designs for the hotel.

Pugachev has been close to Putin since the beginning of the 1990s, when he founded the Retail Northern Bank in Leningrad at the age of 27. Putin was working for the Leningrad city administration at the time.

Pugachev went on to found the Mezhprombank, which successfully rode out the financial crisis of 1998. He formed a close business relationship with President Yeltsin’s daughter Tatyana Dyachenko. Although Pugachev resigned his positions in the bank in 2001, he is still widely believed to be in control. He now has interests in shipping, aero-space and property.

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