A British businessman challenging the Russian government over its break-up of the Yukos oil company has accused the Kremlin of threats and intimidation.

Tim Osborne, a solicitor and director of GML, the majority shareholder in the now-defunct Yukos, said his foreign travel has been restricted since Russia’s prosecutor general announced he was under investigation for alleged embezzlement of $10 billion (£5 billion).

He said the intimidation began in August 2006 after GML and others asked a Dutch court not to recognise the authority of the receiver in the Yukos bankruptcy in Russia.

Shortly after GML won its case, the Russian prosecutor general made the allegations against Osborne and three Americans linked to the oil company, although none has been formally charged or personally notified by the country’s authorities of the accusations.

Osborne said the Foreign Office, which has protested to Russia over his treatment, warned him not to travel beyond certain western European countries, America and Israel, because it could not guarantee his return to Britain if he was arrested.

“They are concerned that the investigation could become a charge and a notice would be sent out to Interpol who would have no choice but to stop me at the border,” he said.

Osborne told The Sunday Times he has not ruled out further ramifications as he heads the largest commercial-arbitration claim ever filed, in which GML will seek minimum damages of $28.3 billion from Russia for the seizure of Yukos’s investments and assets.

The damages, which could exceed $50 billion, are being sought under the terms of the Energy Charter Treaty (ECT) and will be decided in an arbitration case in the Hague.

Yukos hit the headlines in 2003 when its chief executive Mikhail Khodorkovsky was arrested. In 2005 he was convicted of fraud in what was widely seen as a politically motivated prosecution and sentenced to eight years in prison.

Yukos shareholders accuse the Russian government of unlawfully expropriating their investments, leading to the company’s bankruptcy in 2006 and dissolution in November 2007.

The ECT provides a legally binding framework for foreign investment and trade in energy. It provides specifically that investments must not be nationalised or expropriated without compensation.

The treaty has been signed by 51 states, including Russia, and the European Union. Russia has not ratified the agreement but the Yukos shareholders argue that article 45 of the treaty provides for the ECT to be provisionally binding on states that have signed it.

The admissibility of the GML case against the Russian government will be discussed at a two-week hearing in the Hague in November, with an estimated decision by June 2009.