Was soft-drink entrepreneur used as a cover by Litvinenko assassins?

To his recent acquaintances, Andrei Lugovoi is the embodiment of a new Russian entrepreneur. A debonair millionaire, he deals in nothing more offensive than a mildly alcoholic soft drink.

His company, Pershin, owns a £25m factory 130 miles south of Moscow which is Russia's largest manufacturer of kvass - a traditional beverage flavoured with fruit or herbs and known as "children's beer" for its 1 per cent alcohol content.

But while Mr Lugovoi, who has three children, makes a handsome living from the kvass trade (Pershin is worth an estimated £49m and he owns a large villa outside Moscow), it is an altogether more shadowy trade where he made his name.

The key witness in the poisoning of Alexander Litvinenko is the scion of a family of distinguished soldiers and servants of the Russian state.

His grandfather was twice decorated in the Russo-Japanese War of 1904-05 and his father was in charge of the political education of the Red Army's nuclear missile corps.

It was unsurprising therefore that when his business contact in London should fall suddenly ill with polonium-210 poisoning, the name of Mr Lugovoi, who was yesterday said to himself be suffering from radiation sickness, should rapidly come to the fore.

Apart from kvass, the other area of activity of Pershin is organising security for private individuals and corporations.

The 40-year-old businessman was for 10 years a member of the KGB and, after the collapse of the Soviet Union, a security officer in the highest echelons of the Russian state, working with those who benefited most from the rampant capitalism of the 1990s.

Mr Lugovoi, who had previously shied away from all publicity, went so far as to hold a televised press conference to issue his denial of any involvement in Mr Litvinenko's murder and promptly took his family off to be tested for exposure to the radioactive isotope.

He said afterwards: "Traces were found even on my children and on my wife. To think that I would handle the stuff and put them at risk is simply ludicrous."

Whether Mr Lugovoi is being treated as a potential suspect in the murder as well as a witness yesterday remained a fact known only to nine officers from Scotland Yard's anti-terrorist branch and the office of the Russian prosecutor general.

Mr Lugovoi has protested that although he served in the KGB, he was never in the employ of its successor, the FSB, for which Mr Litvinenko was a lieutenant-colonel.

But there is no doubt that Mr Lugovoi is inextricably linked with the organisations and individuals at the heart of the saga of Mr Litvinenko's poisoning.

Badri Patarkatsishvili, a Georgian entrepreneur and close ally of the exiled billionaire Boris Berezovsky, was one of those whose security was organised by Mr Lugovoi at the height of the influence of Russia's oligarchs under Boris Yeltsin.

When asked last week about speculation surrounding Mr Lugovoi's role in Mr Litvinenko's death, Mr Patarkatsishvili said: "There is only one truth I agree with and it is the saying, 'former KGB agents do not exist'."

Born in Azerbaijan in 1966, Mr Lugovoi spent his childhood in the Caucasus and eastern Europe on Soviet army bases. He graduated from an elite military college in 1987 and went straight into the 9th Directorate of the KGB, the unit in charge of protecting high-ranking state officials.

In 1991, he was transferred to the new General Guard Department and a year later became second in command of the elite unit dedicated to protecting the prime minister, Yegor Gaidar, who was this week recovering from what he claimed was a poisoning attempt.

Mr Lugovoi ended his status as an official employee of the state in 1997, when he became head of security for ORT, the television station owned by Mr Berezovsky, at the time a prominent supporter of Mr Yeltsin and ally of Vladimir Putin.

For the next three years, Mr Lugovoi became a vital part of Mr Berezovsky's empire, recruiting to his security operation former KGB colleagues such as Vyacheslav Sokolenko, who was also among those who travelled to London.

When Mr Berezovsky suddenly fell out of favour and fled to Britain in 2000, Mr Lugovoi was caught in the backlash. In 2002, he was jailed for 14 months on charges related to unproven fraud allegations against his former employer.

The perception that Mr Lugovoi has "done time" for Mr Berezovsky has been highlighted as one reason why his involvement in the murder of Mr Litvinenko, a close ally of the oligarch, is unlikely.

But the Yard is understood to be looking closely at the theory that Mr Lugovoi, whether with his knowledge or not, was used as a cover by Mr Litvinenko's assassins.

The two men met 13 times in London this year to discuss various business ventures and swap intelligence, including at the Millennium Hotel in Mayfair on 1 November, the date when Mr Litvinenko fell ill.

The traces of polonium-210 found in Mr Lugovoi and at various locations such as Arsenal's Emirates stadium, where Mr Lugovoi and his partner, Dmitry Kovtun, watched a match with CSKA Moscow on 1 November, could emanate from contact with Mr Litvinenko on that day.

But there is also evidence the polonium was in London for at least a week before 1 November and could have been brought into Britain by a member of Mr Lugovoi's party on a previous trip. A British Airways flight and five rooms in a hotel, the Sheraton Park Lane, used by Mr Lugovoi and his party on 25 October have tested positive for polonium-210.

Mr Lugovoi has said: "Someone is trying to set me up."