Citigroup has failed to secure $10 billion (£5 billion) in financing for Vladimir Potanin, the Russian oligarch, because of continuing turmoil in the credit markets.

Mr Potanin's inability to raise financing in London means he will almost certainly fail in his bid to find $15.7 billion to buy a 25 per cent stake in Norilsk Nickel, the largest nickel miner in the world.

If Mr Potanin falls short of the $15.7billion target by 6pm tomorrow night, the stake will be sold to Rusal, the Russian aluminium giant.

Mr Potanin had a pre-emptive right to buy a 25 per cent stake in Norilsk after it was put up for sale by his partner Mikhail Prokhorov.

Mr Potanin hired Citigroup to help raise $10 billion from Western markets but the credit crunch has made this impossible.

The oligarch is thought to have raised about $5 billion from two Russian banks but unless he can find last-minute financing in the Middle East or China, the option will lapse.

Mr Prokhorov is selling his stake in Norilsk, considered by analysts to be one of Russia's most important natural resource assets, after falling out with the Kremlin.

The Moscow rumour-mill suggests Mr Prokhorov lost favour after being involved in a number of embarrassing incidents.

At the start of the year, Mr Prokhorov, 42, was arrested in Courchevel, the French ski resort, for allegedly hiring prostitutes for a party. He was released without charge.

Mr Potanin and Mr Prokhorov have together created one of the largest resources empires in Russia, but the partnership is rapidly unravelling.

Mr Potanin's attempt to buy out his partner in Norilsk has been hampered by tightening credit markets, which have restricted funding and scuppered scores of deals across the globe.

Mr Potanin is thought to have raised $2billion from Sberbank, a Russian savings institution, and a further $3 billion from VTB, a Russian retail bank.

Sources in Moscow have suggested that Mr Potanin has been able to raise the money from VTB by leaving a $2.6 billion bond raised earlier this year on deposit at the bank.

Meanwhile, Rusal is preparing to move quickly should Mr Potanin fail to raise the $15.7 billion needed.

If Rusal buys his stake, Mr Prokhorov will receive 11 per cent of the enlarged company and an undisclosed cash payment.

Rusal has a consortium of banks including Merrill Lynch, ABN Amro, BNP Paribas and Credit Suisse putting up $4.5 billion for the share purchase.

If Rusal buys Mr Prokhorov's stake it is expected then to make a bid for Mr Potanin's 26 per cent share of Norilsk.

However, bankers in London have warned that Rusal may face the same problem Mr Potanin has experienced if it attempts to raise more money.

With credit markets tight and so much money already committed to a potential BHP Billiton takeover of Rio Tinto, there is little surplus credit.

Bankers have also warned that there is little appetite for Russian investments ahead of next year's presidential election.

There is concern about how the country will be run by Vladimir Putin's chosen successor, Dmitry Medvedev, and about how much control Mr Putin will retain.

A spokesman for Citigroup declined to comment and Mr Potanin was unavailable.

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