EVEN by the flamboyant standards of Kirsan Ilyumzhinov, the eccentric, Rolls-Royce-driving president of the impoverished Russian republic of Kalmykia, the scheme is extravagant.

In a large expanse of parched steppe on the outskirts of Elista, the sleepy capital, Ilyumzhinov, 42, is preparing to spend hundreds of millions of pounds on a colossal monument to his life-long passion: chess.

A five-storey, dome-shaped palace dedicated to the game is already in place. Visitors attending tournaments there will soon be able to stay in a hotel shaped like four giant chess pieces. There will also be an amphitheatre where games of “human chess” will be played, with people moving across an enormous board.

For those who might relish a short break from chess, Ilyumzhinov is laying on an opera house, ski lifts to artificial slopes, a man-made lake with a beach, an airfield and a safari centre where tourists will be able to shoot wolves from helicopters.

Chess City — as it will be known — is intended to put Europe’s only Buddhist republic on the map and will feature not only temples but a sprawling residence for the Dalai Lama in case he should visit.

The leader, who is fond of white capes and designer suits, was elected president of the World Chess Federation in 1995 and once toured 80 countries in a year.

“The inhabitants of Kalmykia won’t have to travel to Japan or other far-away places to look into the future because everything will be here in Chess City,” said Ilyumzhinov, who won the republic’s own chess championship at the age of nine. “The city will set the standard for the rest of the world.”

Ilyumzhinov’s plans are bitterly opposed by many in Kalmykia, one of Russia’s poorest republics, where the average monthly salary is £55 and water is brought in by lorry from neighbouring regions.

“Chess and money — that’s all he’s interested in, while we’re struggling to feed our children,” said Nyudla Kichikova, a mother of four who has joined a hunger strike by 30 local people demanding the president’s resignation.

An unemployed accountant who earns £25 a month by picking potatoes, she has taken only water for 16 days and lies in bed under a banner stating: “Kirsan, handcuffs await you.”

“Chess City is a farce,” she cried. “He has no shame.”

Ilyumzhinov was 31 when he became president of Kalmykia, a semi-autonomous republic of 300,000 souls in southern Russia, near the Caspian Sea. Its indigenous people are descendants of a Mongol tribe, driven west in the 17th century, whose bloodline is traced back to Genghis Khan.

Billboards of the president on horseback dominate the capital, a drab mixture of single-storey houses and Soviet-era apartment blocks distinguished from other provincial Russian towns by small Buddhist shrines dotted around its streets.

Ilyumzhinov made his fortune in the car business and was one of the first people in the former Soviet Union to own a Rolls. He won election in 1993 after promising to turn Kalmykia into a “second Kuwait” where “every shepherd would have a cellphone”. He has yet to fulfil that promise.

Nor, according to locals, has he delivered on a pledge to pay $100 to each person who voted for him. He once said he would buy Diego Maradona, the Argentine footballer, for a local club but that did not happen either.

Most news bulletins nevertheless begin with glowing reports of his latest achievements and his curious beliefs.

“I have been on a UFO,” he said in 2001. “The vessel was the size of a football field. The extraterrestrials put a yellow space suit on me. They gave me a tour of the spaceship and showed me the command centre. We flew to some planet. I felt very comfortable with them, very natural.”

Yet it is chess that preoccupies Ilyumzhinov. The game is an important part of the school curriculum.

Since Ilyumzhinov built his £20m palace to stage the 1998 World Chess Federation championship, there has been muttering among his people about how they have remained pawns while he plays king.

“He has done nothing for the republic,” complained Valeri Badmayev, 53, a journalist on the hunger strike. “Unemployment is at 34%, there is no press freedom and he has crushed dissent. He runs the place like a medieval baron.”

Supporters of Ilyumzhinov reject such criticism. Buryancha Galzanov, the president’s spokesman, puts unemployment at 3.5% and says the republic’s agriculture is flourishing. Chess City will in any case be built with foreign investment, officials say.

“All this criticism is ridiculous,” said Netgen Platonov, the deputy head of Chess City. “People say they are poor but if you think only about your own belly we shouldn’t travel to space either.”

Opposition can in any case be dangerous. Larisa Yudina, the editor of an underground newspaper, accused the government of corruption. She was stabbed to death and dumped in a pond in 1998. After pressure from Moscow, one of the president’s aides and several other men were charged with the killing.

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