It is teatime in the Swiss lakeside town of Zug. Matthias Warnig blushes crimson and shuffles in his chair. “It was industrial espionage,” the Nord Stream chief executive says as he recalls his Cold War days as an officer in the Stasi, the East German secret service.

Mr Warnig — an associate of Vladimir Putin — may be coy about his past but not of the present, as one of the most powerful players in a geopolitical game that is set to shape Europe’s energy future for the next 50 years. Nord Stream, a Gazprom-controlled project to build a submarine pipeline linking the vast gas reserves of Siberia directly with consumers in Western Europe, is on a roll, he says.

Nord Stream received one of the final construction permits required, from the Danish Government, this month and construction could start as early as the spring.

Once built in 2011, the 1,200km pipeline will pump 55 billion cubic meters of gas every year — equivalent to nearly 70 per cent of Germany’s current demand — from Vyborg in northern Russia beneath the Baltic to a terminal at Greifswald in western Germany. But the €7.4 billion project has been fraught with political intrigue — so perhaps it’s no surprise that Mr Warnig, 54, has a rather unconventional CV.

In bypassing Ukraine, Nord Stream will at a stroke undermine Russia’s former Soviet vassal, which controls much of Europe’s access to Russian gas. Britain and America, meanwhile, have fretted that the new pipeline will sharply boost Western Europe’s energy dependency on the Kremlin.

Mr Warnig is eager to scotch the notion that Russia is an unreliable energy partner, despite concerns about a simmering row with Ukraine that left millions of consumers across Central Europe shivering last winter.

“There is a long tradition of Russian gas supply to Europe,” he says reassuringly. “Gazprom has been a supplier for 40 years ... Russia is 100 per cent focused on piped gas delivery to Europe.” It is an argument that Nord Stream, which is 51 per cent owned by Gazprom, Russia’s state-controlled gas producer, has been advancing ruthlessly at the highest levels.

Gerhard Schröder, the former Chancellor of Germany, was recruited as Nord Stream’s chairman shortly after stepping down from office in 2005 — a move that provoked widespread criticism. While Paavo Lipponen, a former Finnish Prime Minister, was also hired as a political consultant last year to help to settle a debate over the environmental impact of the pipeline, which runs close to Finnish territory.

Nord Stream has not disclosed how much either of them has been paid but their contacts and influence have clearly helped to smoothe the way for its construction. Mr Warnig, who is married with children and lives in southern Germany, says he is “honoured” to be working alongside the likes of Mr Schröder.

“He can contribute substantially to the success of the project,” he says. “Working in a political environment is very important.” But while Nord Stream has no shortage of heavy hitters on its payroll, Mr Warnig himself is a fascinating figure. After joining the Stasi in the 1970s, he was based in West Germany for much of the following decade where he is rumoured to have spied on some of Germany’s biggest companies, including banks.

After 1989 and the fall of the Berlin Wall he was hired by one of them — Dresdner Bank — and in 1991 was sent to St Peterbsurg to set up an office.

It was here, he says, that he first met Mr Putin, then the deputy mayor res-ponsible for issuing bank licences.

“I know Mr Putin well,” he says, although he rejects claims in the German press that the two men had met earlier, while they were both working in espionage in Germany in the 1980s.

Whenever they first met, it was clearly a fruitful relationship, along with many others he forged as head of Dresdner Kleinwort’s Russian arm from 2001.

He is reluctant to offer details, however.

“This is a private matter,” he replies, when asked how frequently he meets the Russian Prime Minister.

So did Mr Putin offer him the job running Nord Stream?

“No, it was not like that. I got an offer from Mr Miller [Gazprom’s chief executive] ... But Mr Putin was quite happy that I took the job.”

With such strong connections to the highest levels, Mr Warnig is upbeat about the country’s future.

“Russia is moving from the old Soviet system to a modern industrialised democratic country. But that will take several years and we should not forget this.”

He says he was “lucky” to have had the opportunities he had.

“The Wall came down 20 years ago and for me it was a great chance. I tried to take that chance.”

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