A FIERCE battle for hearts and minds is being fought in the run-up to the St Petersburg G8 summit by rival public relations companies, fuelled by millions of dollars from Russia and its former oligarchs.

While the Russian Federation has hired the big American PR firm Ketchum to soften President Putin’s image at home and abroad, British PR companies are hard at work to counter its efforts.

Lord Bell, the PR veteran behind successive Conservative Party election campaigns, has fallen foul of G8 organisers for his work with the Russian billionaire Boris Berezovsky.

His company paid for advertising space in the official G8 programme but found that its material was rejected because it fell foul of censors.

Lord Bell said: “We bought some space in the G8 programme for Boris Berezovsky’s Civil Liberties Foundation and sent in three ads. But at that stage they refused to run them.

“One was a picture of Putin made up to look like Groucho Marx and it said ‘I wouldn’t want to be a member of any club that would have me as a member’. What seemed to upset them was the word ‘Marx’.”

The contest to define Mr Putin has even pitted two senior members of Tony Blair’s inner circle, now leading PR executives, against each other. One is now aligned with Lord Bell, Baroness Thatcher’s favourite advertising executive.

The Kremlin is said to have spent £4 million hiring Ketchum to mastermind a media blitz in nine countries for Russia’s first presidency of the G8.

Work was also awarded to Portland, the company run by Tim Allan, who formerly worked for Sky and Tony Blair in opposition and government.

He was Alastair Campbell’s deputy in the early years of the Blair administration.

Portland is working for the Kremlin’s G8 organising committee and answering to Dimitri Peskov, the deputy press secretary. Mr Allan was hired in the spring and will represent the Kremlin throughout its presidency until the end of the year. He and his Portland team left for St Petersburg yesterday. Mr Allan says his role is offering media advice to the organising committee and he was behind an unprecedented Westminster briefing of correspondents going to the summit.

A senior Kremlin official closely involved in the G8 preparations told reporters about the key aims of the summit and took questions on anything ranging from energy security to Russia’s human rights record.On that issue the official at least admitted that democracy was not progressing, but he denied that things had got worse under Mr Putin.

Asked whether he was embarrassed to represent a country whose image had taken a battering recently, Mr Allan said: “Russia is changing. We need to accept this change. Part of the change is better engagement with the media and we are helping them to do it.”

Mr Allan is up against a number of British rivals including Darren Murphy, a former political secretary in Downing Street, who joined the PR firm APCO in September 2005.

Mr Murphy’s company provides “media relations and strategic counselling” to two prominent oligarchs who have been jailed under the Putin regime: Mikhail Khodorkovsky and Platon Lebedev.

APCO has used the pre-G8 period to raise awareness of the plight of the two men to undermine Portland’s attempts to portray Mr Putin as a moderniser.

The company is also working with fellow London firm Luther Pendragon, which does media relations for GML, formerly Group Menatep. GML owns 51 per cent of Yukos, formerly owned by Mr Khodorkovsky.

Luther Pendragon has been advising GML over litigation against the Russian Federation about assets seized from Yukos for alleged non-tax payment.