It is a weekday afternoon in Moscow's most luxurious shopping arcade. In the Dolce & Gabbana store - with its chandeliers, black mirror walls and stainless steel D&G logo - a young man is trying on a leather jacket. "It's known as the David Beckham," a shop assistant explains helpfully. The jacket, lined with racoon fur, costs a mere €10,000 (£8,000). "We've sold two in the past week," he adds - proof, it seems, that the global financial crisis has so far not daunted Russian capitalism.

Next door, down a pretty cobbled street, it's business as usual in the Bentley showroom. Here you can pick up an apricot-coloured Bentley convertible for £240,000. Further down the road - and moving away from Moscow's grim, grey KGB headquarters, the Lubyanka - is Tsum, another luxury department store. In the food hall there is caviar and champagne; upstairs you can buy a designer lilac dog-warmer for your chihuahua. The price? 8,999 roubles (£200).

And yet something strange is happening in Russia - the country that invented the word oligarch back in the 1990s to define a new kind of state-connected entrepreneur. Nobody quite agrees what exactly oligarch means; these days it has become a loose synonym for Russia's super-rich. But in the new post-credit-crisis world everyone can concur on one thing - that Russia's oligarchs are in trouble.

Over the past five months, according to the financial news agency Bloomberg, Russia's wealthiest 25 individuals have collectively lost $230bn (£146bn). Tycoons like Oleg Deripaska - Russia's richest man and friend, we now know, of British politicians - have seen their fortunes vaporised. On paper, Roman Abramovich, the Chelsea FC owner, has suffered a $20.3bn wipeout. Alisher Usmanov, the Arsenal shareholder-tycoon has lost $11.7bn, Bloomberg estimates.

Analysts say that private jets could soon be going for bargain basement prices, while some super-rich are scrambling to sell off their villas in Sardinia and Surrey. In Moscow, elite nightclubs have relaxed their strict entry rules - there aren't enough customers. The capital's top restaurants, meanwhile, have stopped accepting credit cards.

Not that Russia's oligarchs are in the mood for entertaining. Since hosting Peter Mandelson and George Osborne on his yacht in Corfu this August, Deripaska has slithered into a classic Westminster political scandal. The aluminium magnate's British-related woes do not stop there: a former business partner, Michael Cherney, is suing him for $4bn in the high court. Rumours suggest he's even been forced to lay off his servants. A spokesman said Deripaska does not comment on private matters.

The twilight of the oligarchs is closely linked to the meltdown in Russia's stock market. Since May, Russia's RTS index has lost 71% of its value. It is no secret that Deripaska borrowed money from western banks using shares in his companies as collateral. The share price crashed; the banks then asked for their cash back. Deripaska is now in danger of being sucked into a black hole of debt. Others have money stuck in Iceland.

Is, then, the era of the oligarch now over? Not everyone agrees with this thesis. But it does seem that Russia's rich are experiencing a moment of historical catharsis. After a giddy decade characterised by the acquisition of yachts, football teams, villas in Kensington, west London and the South of France, and even submarines, there is a distinct sense that Russia is moving into a different, more chastened, epoch.

"My stocks were worth $1bn. They're now worth $300m. OK. So what?" says billionaire Alexander Lebedev, sitting on a brown leather sofa in his comfortable three-storey Moscow townhouse. Lebedev, a Russian businessman and former KGB agent unkindly nicknamed the spy who came in for the gold, is unperturbed by his loss of fortune. Until recently, he had $3.1bn - and was 39th on Forbes' list of Russia's top 100 billionaires. "It doesn't make any difference to my life," he says.

Lebedev is also a former deputy in the Duma and a member of Russia's beleaguered intelligentsia. He says he has survived the crisis that has been aggravated by Russia's war in Georgia better than many of his peers. They took generous loans from Russian banks, bought shares, and then took out more loans from western banks against the value of these shares - a pyramidal arrangement that is now collapsing.

Asked how Russia's oligarchs are bearing up, Lebedev is almost puckishly cheerful. He says: "They are suffering." He adds: "I think material wealth for them is a highly emotional and spiritual thing. They spend a lot of money on their own personal consumption."

Lebedev is a patron of the arts and last week met Tom Stoppard, John Malkovich, and Kevin Spacey to discuss a new Chekhov festival in Crimea, Ukraine. In general, he is scathing of oligarchs as a class - describing them as a bunch of uncultured ignoramuses. "They don't read books. They don't have time. They don't go to exhibitions. They think the only way to impress anyone is to buy a yacht," he observes.

Does he think the crisis might make Russia's elite reconsider their arguably solipsistic lifestyle and values? Lebedev thinks not. "[Friedrich] Nietzsche once said that when something doesn't kill you it makes you stronger. But it isn't applicable in this case," he says. Most oligarchs were not very interested in social injustice, he points out.

This spring Forbes magazine estimated that Russia has 110 billionaires - a record. The top 100 had a combined wealth of $522bn - almost four times higher than in 2004, it said. (At the same time 18.9 million Russians live below the poverty line, federal statistics suggest.) According to Lebedev, some members of this exclusive list - known as the golden 100 - are now down to their last $100m, the über-rich equivalent of skid row. "Worst hit are the property developers," he says.

But in these troubled times analysts suggest that those more likely to feel the pain are Russia's second-tier rich - the country's 150,000 to 200,000 or so millionaires, who have acquired their wealth on the back of Russia's unprecedented economic growth under eight years of Vladimir Putin. Tasteless bling - or pafos to give it its Russian name - is likely to be frowned upon in the new, austere post-crisis era, they add.

"One of the legacies of this is that it will be unacceptable for Russians who have money to throw it around in the way they did before this crisis," suggests Chris Weafer, an analyst with the Moscow-based brokerage UralSib. "People won't have it any more. Or they will consider it unwise to display it," Weafer says. Inevitably, the amount of Russian money '"loshing around" the west end of London will diminish, he adds.

One Londoner, who sources properties for Russian buyers and did not want to be named, said there had been an exodus by Russian businessmen from London in recent weeks. "A lot have gone home to fight [financial] fires due to the plunge in the Moscow stock market," he said.

But Elena Norton, who runs the Russian desk for London estate agent, Knight Frank, said there had been more activity from Moscow-based buyers: "I have seen an increase in the market. Potential buyers all read the newspapers and they know there has been a correction in London house prices and they seem keen to take advantage of that."

Others think that the big losers will not be London's flashy sushi bars but Russian's struggling lower classes. "If my net worth is $10bn and it then falls to $1bn it is still probably unlikely that I will have to go out to the bread line tomorrow. So these oligarchs will still be quite well off. But that doesn't mean Russia will be unaffected. What we should look at is how all of this will affect the blue-collar or lower-income classes," says Marshall Goldman, a Russia scholar at Harvard University.

So far it's not clear what impact the crisis will have on Russia's love affair with consumer spending. Last year Muscovites spent $5bn on luxury goods - $1bn more than New York. At Tretyakovsky Passage - Moscow's boutique-lined shopping street - the number of customers appears to have dipped, though not by much.

Outside Gucci, a driver kipped yesterday in a black seven-series Mercedes; nearby someone had parked their giant Hummer jeep on the pavement.

The Dolce & Gabbana store had just reopened after a refit; upstairs, near the colourful handbags and £400 platforms, a black-suited waiter hovered with champagne glasses. The store had new VIP rooms for exclusive clients, fashion director Vincent Francis said, adding that he was confident the latest range of "short, sexy" party frocks - costing €3,000 to €10,000 each - would fly off the rails before Christmas.

For a few, then, Russia's wild capitalist party isn't quite over yet. "I'm not worried about it. I have my husband to worry about that," said Tatyana Nekrasova, 24, her blonde hair tied into a neat bun, as she emerged from Gucci clutching an 11,000-rouble shirt. She admitted, however: "I have a lot of friends who have investments. They've lost them. They're in a state of shock."

Next month Moscow hosts its annual Millionaire Fair - a four-day extravaganza of diamond-encrusted mobile phones and other examples of bad taste. Other items on sale include Gulfstream jets, space-age pianos, and mahogany-panelled yachts, which might appeal to Peter Mandelson. Yesterday the fair's organiser Yves Gijrath, a Dutch entrepreneur, said he was optimistic the show, held in a giant exhibition hall outside the capital, would be popular again this year.

Russia was not the first country to suddenly acquire wealth and a newly moneyed elite, he said. "It's the same historical situation for any new economy," he said, pointing to the US in the 1950s, Saudi Arabia in the 1970s and Japan in the 1990s. The world's economy was "elastic" and would recover, he predicted, adding: "In its entire history the world has never been as rich as in 2008. There's enough money to go round. The problem is trust."

Paradoxically, Russia's often-surreal ride from communism to capitalism appears to be going full circle. Under Boris Yeltsin a small, favoured group of businessmen was allowed to acquire the country's newly privatised assets at auctions for a fraction of their real value. Last week Putin offered a $50bn state loan to Deripaska, and other cash-strapped oligarchs, struggling to pay back debts to the west. In effect, the Kremlin is poised to renationalise many of Russia's strategic industries.

Nobody is in any doubt as to what befalls oligarchs who disobey the Kremlin. In 2003 Putin arrested Russia's then richest man, Mikhail Khodorkovsky, and broke up his Yukos oil empire. Khodorkovsky was convicted of tax evasion; his real crime was to seek to influence politics and to challenge the president. The former tycoon is serving eight years in a Siberian jail and was recently placed in solitary for not sewing properly.

Russia's oligarchs, of course, deny that they are in a financial hole. Abramovich's aides insist his $20bn losses are fictitious rather than real, since he doesn't intend to sell his shares in mining and gold. Usmanov, a football nut who owns 24% of Arsenal FC, cast his troubles in a more lyrical vein. Asked whether he might be tempted to sell Arsenal, he told the Guardian last week: "My love for Arsenal is like that of a man for a woman. It is not something you can sell."

Additional reporting by Terry Macallister