Sir Mark Thatcher used his mother’s name to help secure a deal worth up to £300,000 a year promoting an oil company connected to the despotic regime in the central Asian country of Kazakhstan.

In return for the cash, Thatcher was expected to use his influence to enhance the image of Nursultan Nazarbayev, the country’s president, according to one of those involved in the agreement.

Thatcher met the Kazakh president in May 2004 bearing a letter from Baroness Thatcher which expressed support for his government. The next day the son of the former prime minister signed a deal with a company, Ar-Oil, which was owned by a member of Nazarbayev’s extended family.

According to a source involved in the deal, it was understood that in return for quarterly payments of $150,000 (£75,000), Thatcher would use his influence and family name to promote not only Ar-Oil’s interests abroad, but those of the Kazakh regime in general.

Thatcher, 54, said last night that the money paid was less than half that amount and that his “consultancy” did not include representing the Kazakh government.

Thatcher has been accused in the past of trading on his mother’s name and reputation, something that he has always denied.

Nazarbayev has been accused of running a corrupt country where criticising him is a criminal offence. Kazakhstan’s leader since 1991, he has now effectively been made president for life.

Previous elections have been strongly criticised for widespread intimidation and fraud and opposition leaders have been murdered. Nazarbayev’s family controls much of the country’s wealth through a network of companies.

Thatcher met the dictator at a meeting in May 2004 which was attended by Yerzhan Dosmukhamedov, an adviser to the president’s son-in-law, Timur Kulibayev, whose father Askar was the leading shareholder in Ar-Oil. It is not known whether he retains his stake.

Dosmukhamedov said: “Mark Thatcher stated to Nazarbayev that his family, his mother and himself would be delighted to help him with his image internationally.

“No money was discussed with Nazarbayev, as it would not have been considered ‘elegant’, but the next day Thatcher agreed a deal with Ar-Oil and the first payment of $150,000 was made to his account in New York.

“The money was for him to represent not just the company, but also the country. It was to keep him sweet.”

The deal was signed in Kulibayev’s office in the Kazakh city of Almaty, before a celebratory meal in Thatcher’s honour at the Bellagio restaurant.

Shortly after receiving the first payment, which this weekend Thatcher recalled as being “more like £30,000”, the deal was dissolved.

Dosmukhamedov, who is now chairman of Atameken, a Kazakh opposition party, said that this was because in August 2004 Thatcher was arrested in South Africa over his involvement in helping to fund the failed plot to overthrow the government of Equatorial Guinea.

Thatcher said that his consultancy with Ar-Oil had already been terminated by then because he came to realise that he would be required to spend too much time in Kazakhstan.

However, he has continued to enjoy a business relationship with Ar-Oil over the past four years. This weekend he said he had “brokered” oil contracts involving the company.

Last week, at the request of Assan Dyussebayev, the Ar-Oil president, Thatcher sent an e-mail to a senior executive of TNK-BP, the British-Russian oil company, to provide a “trade reference” for Dyussebayev, who is attempting to close a deal between the two firms.

Thatcher wrote: “As well as being a personal friend of my family I have enjoyed a business relationship with Assan and Ar-Oil for the past five [sic] years during which time our business has grown from a small consulting agreement into a wider and more sophisticated arrangement.”

Since signing the deal with Ar-Oil, Thatcher also provided references to help to secure work placements in London for Askar Kulibayev’s grandson Beksultan, including one position with Goldman Sachs, the banking firm.

Thatcher admitted sending an e-mail last week to TNK-BP and described his relationship with Ar-Oil as “friendly and commercial, I suppose”.

He confirmed that he had given the Kazakh president a supportive letter from his mother at an airport meeting.

Dogged by scandal

The career of Sir Mark Thatcher has frequently been punctuated by scandal.

In 1984, Margaret Thatcher faced questions in parliament after she lobbied for a company, which her son represented, to secure a contract in Oman. Mark Thatcher is also said to have received a commission from the £20 billion Al-Yamamah arms deal with Saudi Arabia, which his mother signed in 1985, although he denies having received payment.

Following a civil legal action for alleged racketeering in the US, settled out of court, he moved to South Africa.

His most notorious escapade involved his role in providing finance, and allegedly helping to plan a coup against Equatorial Guinea, for which he was fined and given a suspended sentence in 2005 after pleading guilty to unwittingly abetting the coup.

Additional reporting: Mark Hollingsworth

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