Dubai is backing a Kremlin-linked energy company in an offer to buy the last and biggest of Russia's wholesale power-generating companies in a potential $5bn-plus deal that could mark the first strategic foray into Russia by a Middle Eastern fund. Anatoly Chubais, Russia's former privatisation chief and chief executive of Unified Energy Systems, said on Monday that Roskommunenergo, a Russian energy company, had joined Dubai World the investment arm of the United Arab Emirates to offer to buy OGK-1.

Russia on Tuesday signed off on a series of steep price rises for domestic gas, power and railway services for the next four years on the eve of Dmitry Medvedev's inauguration as the country's new president.

Russian oil output in 2003 was increasing at such a swift pace even Saudi Arabia worried about upstart energy companies - including Yukos and Sibneft - then posting production gains of more than 20 per cent. But from 2004 the Moscow government changed its tax regime and began to take over privately held assets, including Yukos, and so Saudi Arabia's fears proved short-lived.

Five years ago Russia's rapidly growing oil exports were seen as the cure for the US and Europe's addiction to Middle East oil, international oil companies' most exciting potential source of revenue and the only thing that could quench China's insatiable new thirst.

Russia's environmental watchdog yesterday said it had filed a Rbs4.35bn ($180m) pollution suit against Norilsk Nickel, the Russian mining group, in its largest ever environmental complaint against a Russian company.