THERE is a joke doing the rounds about the Russian gas monopoly: how did they put out the Olympic flame after the Turin Winter Games? Gazprom turned off the tap.

It would be funnier if it were not so close to the bone. In the depths of Gazprom’s headquarters — a blue glass and granite skyscraper in southern Moscow — there is a control room dominated by a 20ft-high electronic model of Eurasia’s gas network.

From here, Gazprom engineers control a vast spider’s web of pipelines, pumps and valves that deliver a quarter of Europe’s gas — most of it through neighbouring Ukraine.

It was here that, on New Year’s Day, they cut off gas supplies to Ukraine during a pricing dispute, causing severe shortages across Europe in the depths of winter.

The crisis shocked the European Union into drawing up plans for a new common energy policy, which José Manuel Barroso, the European Commission President, will present to Moscow on Friday. It also exposed an identity crisis at the heart of Russia’s largest company and the world’s biggest gas producer.

On the one hand, Aleksei Miller, Gazprom’s chief executive, says that he wants to turn the company into a global energy giant like BP or ExxonMobil. On the other, Gazprom has become the Kremlin’s favourite tool for controlling Russia’s population and reclaiming the international clout lost when the Soviet Union collapsed. Vladimir Putin wrote as much in an academic journal in 1999 — the year before he became President. The State should use the country’ s natural resources, he argued, to ensure “Russia’s emergence from its deep crisis and restoration of its former power”.

Nowhere is this dichotomy more apparent than inside Gazprom’s headquarters, which was post-Soviet Russia’s first skyscraper when it opened ten years ago.

Some parts could be the offices of any large Western corporation. Staff in sharp suits peer at flatscreen monitors in air-conditioned offices — all non-smoking — and breeze through spotless corridors to refuel at Italian coffee machines. It is a far cry from the notoriously opaque, corrupt and inefficient company that grew out of the Soviet Gas Ministry after the Iron Curtain came down.

Alexander Medvedev, Gazprom’s deputy chairman, remembers dealing with the gas giant when he worked at an oil company in the 1990s. “At that time, it was still 80 per cent ministerial and only 20 per cent corporation-style. Probably today it is vice versa,” he told The Times.

Other parts of Gazprom’s compound testify to an enduringly Soviet concept of economic efficiency. It has three restaurants, two bars, a flower shop, a bank, a supermarket, a sports centre with a 25-metre swimming pool, and even a clinic with some 200 doctors.

The 5,000 staff members here earn average salaries of $1,000 a month — four times the national norm and twice the average in the banking sector. For those with children, there is a Gazprom school for a nominal fee. Every employee, plus a spouse and one child, has free medical care.

The company has a total of 330,000 employees, less than 40 per cent of whom are engaged in core activities. It has dozens of subsidiaries, including a Black Sea resort, a home furnishings company, two airports, a porcelain manufacturer, an ice rink and a chicken farm. Most of these were given by customers in lieu of cash payments in the 1990s and will be sold soon, Gazprom says.

Others have been acquired more recently. The most controversial is Gazprom Media, which has taken over dozens of television channels, radio stations and newspapers since 2000. It owns the national television channel NTV and the daily broadsheet Izvestia.

There are similar contradictions in Gazprom’s dealings with Russia’s former Soviet neighbours, analysts say. The group says it is phasing out subsidies to all ex-Soviet republics after 15 years of supplying them with gas at below international prices, but its prices vary hugely between countries.

Gazprom cut off Ukraine last year after it refused to raise the price that it paid for Russian gas from $50 to $230 per 1,000 cubic metres. The company now wants Moldova, another former Soviet state that turned its back on Moscow, to pay international prices from April 1. Yet it still supplies gas at below $50 to Belarus, whose autocratic leader, President Lukashenko, has close ties to the Kremlin and faces an election on Sunday.

Mr Medvedev denied that the Kremlin had used Gazprom to punish President Yushchenko of Ukraine, for leading the Orange Revolution: “To create an instrument with billions and billions of investment just to switch off the gas is not only stupid but absolutely economically inefficient.”

BIG NUMBERS

Gazprom . . .

employs 330,000 people

BIG PLAYER

1993: Gazprom founded under the leadership of Prime Minister Viktor Chernomyrdin

2005: Gapzrom buys the oil company Sibneft from Roman Abramovich

2005: Russian Government increases its stake in Gazprom to 51 per cent

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive