Russia transferred a portion of its hard currency reserves to an obscure fund management company based in the tax haven of Jersey, the biggest of the Channel Islands, between 1993 and 1997, Mr Sergei Dubinin, the former head of Russia's central bank, admitted yesterday.

The transfers, which included monies from the International Monetary Fund, were an attempt to shield the funds from foreign creditors, according to Mr Dubinin.

Though not illegal, the transfers could complicate the Russian government's talks with foreign creditors as it seeks to restructure its $150 billion (€133 billion) of external debt and strike a new deal with the IMF.

Mr Dubinin said the highest sum ever held in Jersey through a company called Fimaco was $1.4 billion in 1994.