A billionaire oligarch close to Vladimir Putin has been accused of using a Scottish shell firm to steal millions of dollars of taxpayers' money.

Ziyavudin Magomedov - whose family is said to be Russia's fifth richest - has already been charged with racketeering in a corruption scandal sparking global speculation of a new Kremlin power struggle.

However, his case has also thrown open the closest ever alleged links between one of Scotland's notorious "tax haven" companies and a member of Russia's ruling elite.

Investigators argue Mr Magomedov was responsible for sending $18m to a Scottish limited partnership (SLP) in return for imports of Ukrainian grain which never took place, according to the news site Znak.

Ziyavudin Magomedov in court

The money for the grain came from a semi-privatised company in which Mr Magomedov owned just under 50 per cent of shares.

Both Russian state TV Vesti and Znak, citing unnamed law enforcement officials, have named the SLP concerned as Edinburgh-registered Newbay Investments.

Mr Magomedov - who was arrested at the end of March as he prepared to fly his private jet to Miami - was named by the US Department of Justice as one of 96 Russian business leaders close to Mr Putin. However, the 49-year-old tycoon is more frequently linked with Mr Putin's prime minister, former President Dmitriy Medvedev. The Financial Times, described Mr Magomedov's fortunes as a "bellwether" for those of Mr Medvedev.

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Magomedov - and his brother Magomed Magomedov, who has also been arrested - both deny any wrongdoing. Mr Magomedov insists that it was he who blew the whistle on payments to the Newbay and to Swiss companies referred to by Russian media as part of the Newbay "group".

Speaking from a cage at Tverskoy district court in central Moscow after his arraignment in March, Mr Magomedov said: "I categorically disagree with the charges presented ... The prosecution case does not stand up to scrutiny." The court earlier this week extended his remand despite Mr Magomedov offering $35m in bail to allow him to travel to the United States for medical treatment.

UK and Scottish authorities have become increasingly concerned by the abuse of SLPs for fraud and money-laundering in the former Soviet Union.

After the Salisbury poisonings earlier this year, the British Government announced a new crackdown on the entities, dubbed "Britain's home-grown secrecy vehicles" by anti-corruption campaign group Transparency International. Critics, including the SNP, do not believe the Tories are doing enough.

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Newbay Investments was dissolved last year shortly after emergency rules would have - theoretically, at least - forced it to reveal its ultimate beneficial owner. It was set up in 2010 by a Dublin company formation agency with two opaquely owned partners in Belize.

The SLP was registered at 78 Montgomery Street in Edinburgh, a flat where around 3,000 shell firms have been headquartered, including many involved in the $1 billion looting of Moldovan banks and the multi-billion-dollar Laundromats syphoning dirty money out of Russia and Azerbaijan.

78 Montgomery Street

Mr Magomedov was arrested as he prepared to take a trip on his private jet to Miami. His Summa group is a major Russian company and he has substantial interests in telecoms, oil and construction - including building one of the new stadiums for the World Cup. He has investments outside Russia too, including in Uber, and co-chairs Richard Branson's Virgin Hyperloop One.

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Other Russian tycoons who have faced prosecution have claimed that they are the victims of politics. Commentators routinely warn that corruption prosecutions can be arbitrary - with political connections protecting potentially guilty oligarchs.