his Swiss-based oil trading company, Gunvor.

Asked why Putin's associate had chosen to embark on such a high-risk strategy, his London-based spokesman, Michael Prescott, told the Guardian in March: "We don't see it as a risky move. "We are determined to put an end to all the falsehoods. Gunvor and Gennady Timchenko ... have had enough of untrue stories appearing in spite of their best efforts to prevent this by simple and open dialogue."

Schillings issued a writ in January over the Economist article, published on 27 November 2008, called Grease my palm. It describes bribery and corruption under the Putin regime as "endemic", and points out that, according to Transparency International, Russia is one of the world's most corrupt countries, on a par with Kenya and Bangladesh.

The article, partof a Russia series, also mentioned Timchenko's alleged links with Putin. Timchenko is a highly reclusive billionaire oil trader who lives in Geneva, Switzerland. He appeared for the first time last year in the Forbes annual rich list, as the list's highest new entrant, with a fortune estimated at $2.5bn (£1.5bn).

The Economist said today: "Gunvor, Mr Gennady Timchenko and the Economist are pleased to announce they have settled the libel litigation brought by Gunvor and Mr Timchenko over an article published in last November's Economist." An agreed text will be published in tomorrow's issue.

Timchenko co-founded Gunvor more than 10 years ago. The company is the world's third-largest oil trader and exports about a third of Russia's seaborne oil. Timchenko has denied accusations that Gunvor had won favourable contracts