Boris Berezovsky, one of Russia's richest men, was wanted for fraud

The tycoon, who has had an increasingly bitter relationship with the Kremlin, was granted political asylum in the UK earlier this week.

Bow Street Magistrates Court said Mr Berezovsky could not therefore be extradited, so it was pointless to proceed.

It discharged the case and the Russian government was ordered to pay Mr Berezovsky's legal costs.

Counsel James Lewis, for the Russian government, said officials were considering whether they could mount a legal challenge to the asylum decision.

Mr Berezovsky was arrested in the UK in April, after Moscow requested his extradition to face charges of massive fraud.

He was accused of defrauding Russia's south-eastern Samara region in the 1990s while he was head of the Logovaz business empire.

Mr Berezovsky, thought to be the second richest man in Russia, has said he is being victimised for his political beliefs.

He is one of the main backers of a fledgling liberal movement in Russia, which stands in opposition to nationalist President Vladimir Putin.

Ups and downs

Like other flamboyant Russian tycoons, Mr Berezovsky profited from the rapid privatisation process in the early 1990s.

He built up an empire encompassing media, banks, cars, energy and a stake in national airline Aeroflot.

He was a close ally of Boris Yeltsin, who was president during most of the 1990s.

But his fortunes changed under Mr Putin's government, which Mr Berezovsky claimed was steering Russia back towards authoritarian rule.

Mr Berezovsky has been living in the UK under self-imposed exile since 2000.

His lawyer, Alun Jones QC, told a court in April Mr Berezovsky could be killed by government loyalists if he returned to Moscow.