It's one of the biggest maritime puzzles since the Mary Celeste. In July a Russian-crewed cargo ship vanished off the coast of Finland. Moscow claims it was hijacked. Now one of the accused exclusively reveals a very different version of events . . .

It began as a curio item on an obscure maritime website and grew into the mystery of the summer. What exactly happened to the Arctic Sea, the enigmatic cargo ship allegedly seized by pirates, not off the wild coast of Somalia but in the genteel EU waters of the Baltic?

Two months after the ship was "hijacked", the answer is now clear – at least according to Russian investigators. Last week, they announced they had finished their probe into one of the biggest maritime puzzles since another ill-starred merchant ship, the Mary Celeste, was found drifting, crewless, in the Atlantic. And according to Moscow, the story is reassuringly simple. Eight armed "pirates" seized the Arctic Sea in the late evening of 24 July, off the coast of Sweden. The pirates told the captain to sail for Africa. The Arctic Sea then slipped through the Channel and "disappeared" on or around 30 July, prompting a frantic international search.

Three weeks later, on 17 August, a Russian naval frigate found and intercepted the boat some 300 miles off the Cape Verde Islands. Russian officers arrested the "pirates", who turned out to be a bunch of ethnic Russians from Estonia and Latvia. They also freed the Arctic Sea's 15 Russian crew members. This bold mission, the Kremlin claims, involving ships, military aircraft and other resources, was a national triumph. There's only one problem with Moscow's version of events: it just doesn't stack up.

Sitting in his Moscow office, Konstantin Baranovsky – lawyer for one of the "pirates" – calmly recounts an alternative reality. His client is Dmitry Bartenev, a 41-year-old sailor who was born and lives in Estonia's capital, Tallinn. His grandfather was a Soviet admiral, his father worked for the Soviet commercial fleet.

Bartenev, his lawyer says, paints a completely different picture of events surrounding the Arctic Sea. There was no hijacking, and he is not a pirate. Instead, Bartenev claims that he and his seven colleagues are harmless "ecologists" who had been working for an unnamed organisation.

"He's told me what that organisation is, but he won't let me disclose it. I don't know why," says Baranovsky.

Bartenev's account, relayed by his lawyer, goes like this. On 24 July, he and his colleagues set off before dawn from the Estonian summer beach resort of Pärnu. Heading off into the grey and choppy Baltic Sea in their soft-hulled inflatable dinghy, they were testing a new GPS unit. But the expedition turned out to be a terrible mistake.

"Suddenly a big wave hit us," Bartenev told his lawyer from prison. "Water flooded our navigation system and broke it. Our engine started to work badly. We lost our bearings. Then it got dark. We saw two ships up ahead of us. One of them was a big passenger liner – but it was going too fast. The other was the Arctic Sea. It had a low hull. We headed for it."

According to Bartenev, the Arctic Sea's crew plucked his seven friends from their stricken boat while he stayed at the wheel. Finally they rescued him, then winched on board his battered dinghy.

"The crew were very friendly. When they realised we were Russians, they took us to the saloon bar and cracked open a bottle of vodka. There was a lot of booze on the Arctic Sea: whisky and strong alcohol of all kinds."

Bartenev says he asked the captain to put them ashore at the nearest port – but the request was refused without explanation. So with no immediate prospect of getting off, they relaxed.

Russian investigators have portrayed their three weeks on board the Arctic Sea as a tense hostage drama. In fact, Bartenev says, it was more like a jolly P&O cruise – with swimming, sunbathing and drinks under a twinkling tropical sky.

"There was a swimming pool; the crew had improvised it at the bottom of the ship. We swam in it. There was also a gym, which we were allowed to use. We spent a lot of time sunbathing," Bartenev says. "We slept in a small cabin. We made friends with several engineers and the cook. He cooked for us together with everybody else."

Crucially, Bartenev says he had no idea that the ship was, by now, at the centre of an international search. Having set off on 22 July from the Finnish port of Jakobstad with a cargo of timber, the Arctic Sea was, according to Moscow, supposed to reach the port of Bejaia in Algeria, on 4 August.

"We didn't realise it had gone missing," Bartenev insists. He and his colleagues did, however, notice that the ship was veering several thousand miles in the wrong direction, down the west coast of Africa. "It got warmer. We were clearly heading south," he told his lawyer.

This muggy equatorial odyssey finally ended at lunchtime on 17 August, when the Russian naval frigate, the Ladny, came alongside. The Arctic Sea's crew had spotted the heavily armed vessel two days previously and, according to Bartenev, its ominous appearance prompted his new companions to nervously break out the vodka again. "We spent the last two nights on board getting drunk with the crew," he explains.

Strangely, the Arctic Sea's captain informed the pursuing Russians that his vessel was North Korean. But this merely delayed the inevitable – an order to come aboard the Ladny. At 11.41am, Russian personnel arrested Bartenev. They took him and the other "pirates" to a military airport on the Cape Verde islands.

From there, he was whisked by Ilyushin Il-76 military plane to Moscow, chucked in jail and charged with kidnapping and piracy. Eleven of the Arctic Sea's sailors were also flown back to Moscow for interrogation, and subsequently barred from talking to the press. The captain, Sergei Zaretsky, and three others stayed behind.

One month later they are still on the boat, which instead of heading back to Russia has been kept out of view somewhere near the Canary Islands. Baranovsky describes Russian investigators' account of the drama as "ludicrous". He poses the obvious question: why would anybody want to hijack a ship full of wood?

"The official version of the incident isn't true. It looks like eight mad guys took a rubber boat, went into the centre of the Baltic Sea, and grabbed a ship full of lumber. It's not only strange, it's unbelievable."

Of course, Bartenev's story also appears dubious in places, especially his claim to be an ecologist. (The sailor has two "Celtic" tattoos on his upper arms – not very Greenpeace.) Nonetheless, his testimony – with its credibly banal account of life on board the Arctic Sea – blows a hole in the official version of events. His suggestion that there was no hijacking, and that the crew were at no stage under duress, is backed by the official investigators' concession that there were, in fact, no weapons on board the Arctic Sea.

A more likely scenario is that Bartenev and his fellow "pirates" were set up. But by whom? Over the past month, speculation has swirled in Russian and British papers that the Arctic Sea was carrying a secret consignment of S-300 anti-aircraft interceptors, destined for Tehran.

Israel is opposed to Iran's acquisition of any anti-aircraft weapon that could thwart an Israeli air strike on Iran's nuclear facilities, and suspicion of a government cover-up grew last week when Israel's prime minister, Binyamin Netanyahu, made a secret dash to Moscow. The Kremlin and Netanyahu's office initially denied that he had visited Russia – only to confirm later that he had surreptitiously dropped in by private jet. A subsequent report in the Sunday Times, citing Israeli intelligence sources, suggested that Israel's intelligence service, Mossad, had set up Bartenev and his gangster friends to "hijack" the ship, to force the Russian government's hand and prevent the S-300s from reaching Iran.

But this version of events, though attractive, is ultimately implausible too. Defence experts sniff that a large, complex anti-aircraft system such as the S-300 simply can't be stuffed inside an old shipping container. "It's bullshit," one expert tells me bluntly. Furthermore, Russia's president, Dmitry Medvedev, told CNN last Sunday that he didn't have a problem with flogging weapons to Iran, so long as they were for defensive purposes. Russia has a contract to supply Tehran with S-300s, but so far has not delivered them.

Speaking from Tallinn, Bartenev's brother Alexey yesterday had another, more prosaic explanation for who "framed" the Arctic Sea eight. Alexey says a mysterious businessman named "Vladimir" recruited Bartenev and his seven friends in mid-July. "My brother had been out of work for six months. Suddenly 'Vladimir' offers him a job. The pay is good, more than €1,000 a month. But there's no written contract."

According to Alexey, Bartenev moved to Pärnu on 16 July. He and a group of friends he'd known since sailing school went on training exercises. They camped on the shore. "Vladimir" also gave them a rubber-hulled boat with an outboard motor. The job apparently involved whizzing round the Baltic Sea, filming tankers as they chucked rubbish overboard – an environmental role, in fact. Alexey is adamant his brother isn't a pirate. "He's not at all aggressive. He's extremely sociable, a lovely guy," he says.

Secret arms deal?

To add to all the intrigue, prosecution documents seen by Baranovsky show that another, shadowy group of visitors also dropped in on the Arctic Sea on 22 July – two days before Bartenev says he conked out in his dinghy. These visitors were a group of between 22 and 24 men who arrived by speedboat, and spent 12 hours on board the Arctic Sea. Some reports say they tied up and blindfolded the crew, having posed as drug enforcement officers; others that they dressed up as Swedish police. What they were doing there is unclear. Based on what he has read, Baranovsky says: "They looked like Russian special forces."

The revelation adds further weight to the most compelling scenario – that someone within Russia's intelligence or security community was using the Arctic Sea to illegally smuggle weapons. The ship had spent several weeks in Kaliningrad, Russia's freewheeling Baltic Sea exclave – the perfect place to hide a secret cargo (as well as stock up on cheap vodka). But the nature of that cargo is unclear: some have suggested rockets, others smart bombs. One Estonian commander says cruise missiles.

Certainly, Russia's spy agencies have an established network of trusted contacts in the Middle East, dating back from when the communist Soviet Union covertly sponsored much of the Arab world with arms and ammunition. And these days, its spy agencies are as much about private profit as intelligence activity. The Kremlin's rival factions have long been locked in a deadly struggle not only for influence, but for revenue streams amounting to billions of dollars.

If the Arctic Sea was carrying an illegal cargo as part of a rogue business deal, it appears that someone in government decided to cover it up. Revelations that Russia had been involved in secret arms trading would be deeply embarrassing. A pretend hijacking appears to have been the solution. It is, after all, the perfect pretext for the Russian authorities to board the Arctic Sea and quietly retrieve its cargo, and to justify a lavish air-and-sea rescue mission.

Earlier this month, the journalist who first broke the story of the Arctic Sea's strange "disappearance" fled Russia after receiving a menacing late-night phone call. Mikhail Voitenko, editor of the online maritime bulletin Sovfracht, said an unidentified caller warned him he was "stepping on the toes of some serious people".

I spoke to Voitenko last week. At the time he was hiding in Istanbul; now he has gone to ground in Bangkok. He recalled how the anonymous caller bluntly informed him that he had offended powerful, possibly criminal, interests – adding that "certain people are out for revenge".

Voitenko said, "I was told: 'These guys are very unhappy with you. But they don't want unpleasantness.'" ­ Instead, he was warned to leave the country. Voitenko said he didn't know the identity of his mystery caller, but hinted that the man who spoke with a "chilling voice" was from the FSB, Russia's many tentacled post-KGB spy agency.

Asked what was really hidden on board the Arctic Sea, Voitenko was guardedly cryptic, replying: "Half of those involved in this were private individuals. But half were linked with the state." And asked why the Arctic Sea affair had snowballed into an international incident, he added dryly: "You don't normally get attacks on ships in the Baltic." Last week, his employers announced that they had fired him; he is now writing for the opposition newspaper, Novaya Gazeta.

Bartenev's current residence, meanwhile, is Moscow's Lefortovo prison, Russia's most notorious lock-up. The prison is under the control of the FSB; only VIPs or those involved in politically sensitive cases get to stay here. On Monday, Baranovsky asked a court to bail Bartenev, arguing that Russia had no jurisdiction when it grabbed him in international waters from a Maltese-registered vessel. Predictably, the judge said no. Bartenev made a virtual appearance in court via a video link. He looked thoroughly fed up, sticking out his elbows in disgust.

Barring a miracle, the "pirates" are destined to remain in prison for a long time. The crew of the Arctic Sea have been told to keep their mouths shut. Russian reporters attempting to talk to the crew's families have met a wall of scared silence. This is not the first time individuals have been sacrificed to the opaque interests of the Russian state; nor is it likely to be the last.