Government officials have admitted they knew from "day one" that the frozen £2.35 billion from Roman Abramovich's sale of Chelsea Football Club might never reach Ukraine, despite public promises to deliver humanitarian aid.
An official involved in the 2022 negotiations told the Telegraph they "went eyes open with the fact that this was a possibility" when striking the deal with Roman Abramovich.
The revelation exposes years of governmental inaction across four prime ministers and five chancellors. The official blamed successive administrations for failing to invest "financial pressure, resources or political capital" in resolving what was always going to be problematic.
The shocking admission comes as Chancellor Rachel Reeves and Foreign Secretary David Lammy finally threatened legal action against the sanctioned oligarch on Tuesday, more than three years after the club's sale was completed.
Rachael Reeves and David Lammy have now threatened legal action against Roman Abramovich
GettyThe Chancellor and Foreign Secretary declared in a joint statement: "While the door for negotiations will remain open, we are fully prepared to pursue this through the courts if required."
They expressed being "deeply frustrated that it has not been possible to reach agreement on this with Mr Abramovich so far" and emphasised their determination to "ensure people suffering in Ukraine can benefit from these proceeds as soon as possible".
The frozen proceeds, now worth approximately £2.5 billion, have remained in a UK bank account since Chelsea's sale in 2022, when Abramovich was sanctioned for his alleged links to Vladimir Putin.
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Roman Abramovich was sanctioned by the UK in 2022 due to his links with Vladimir Putin
GettyWhen announcing Chelsea's sale, Abramovich publicly stated he wanted proceeds used "for the benefit of all victims" - language that appeared to include Russian victims alongside Ukrainians.
British officials have consistently rejected these terms, insisting funds must exclusively support humanitarian efforts within Ukraine's borders, and refusing to countenance money being spent on Russian victims or other humanitarian crises.
The European Union backed Britain's position, ruling the money could only be spent within Ukraine, despite charities, including Oxfam and Save the Children, urging then-prime minister Rishi Sunak to ignore the EU's verdict and release the funds.
Officials told the Telegraph: "The decision was to put it in a place where we knew he couldn't get at it, and then there was a principle that this charity would be formed and that it would spend the money wisely."
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They also feared Abramovich might "legally get the money back himself" if sanctions were lifted, making the immediate priority securing the funds rather than determining their ultimate destination.
This defensive approach has now resulted in a three-year stalemate, with the money remaining inaccessible whilst Ukraine awaits desperately needed humanitarian support.
Parliamentary scrutiny has intensified over the protracted delay, with a House of Lords committee declaring it "incomprehensible" that the issue remained unresolved after publishing a damning report in January last year.
Lord Ricketts, who chaired the European Affairs Committee, said: "It's getting ridiculous that this delay should be dragging on and on. I think 'incomprehensible' is still a pretty good word to describe why, three years later, we're still waiting for the money to go to the people who really need it in Ukraine."
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The £2.5billion in proceeds from the sale of Chelsea FC remain sat in a UK bank account
Getty
The legal confrontation carries significant risks beyond further delays to humanitarian aid.
Belgian Prime Minister Bart De Wever cautioned in March that confiscating frozen Russian assets would constitute "an act of war" and pose "systemic risks to the entire financial world system".
Meanwhile, the frozen funds have likely accrued over £100 million in interest, money that remains equally inaccessible. Lord Ricketts acknowledged that an acrimonious legal battle could delay matters even further.
A source explained that Abramovich "can't access" or "spend the money", however threatened "he can stop the trust spending it".
The 58-year-old maintains the original sale terms differ from those the British Government now insists upon.
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