When Ruud Gullit was leading Chelsea to the FA Cup in 1997, Terek Grozny, Chechnya's leading football club, had been temporarily disbanded, thanks to the not so minor issue that their home city had just been reduced to rubble by the Russian Army.

The unexpected appointment of Gullit as Terek manager last month is testament both to the extraordinary rebuilding of Grozny under the ruthless rule of President Ramzan Kadyrov in the past few years and to the lengths some football people will go for a hefty pay cheque. But it also speaks volumes for the growing financial clout of the Russian Premier League, with even mid-table clubs like Terek able to offer juicy contracts to managers and players who five years ago would never have considered a move there.

West London, of course, is where the influence of new Russian money on football has long been at its most visible, but there has been a steady rise in spending back in the motherland, too. For several years the big clubs in Moscow and St Petersburg have had their coffers swelled by rich benefactors, who have helped bring in foreign stars and, in the case of Zenit St Petersburg, foreign coaches. The club is currently managed by the Italian Luciano Spalletti, who moved from Roma to take charge of the side that won the 2008 Uefa Cup under the Dutch manager Dick Advocaat. Advocaat now runs the Russia team, where he took over from yet another Dutchman, Guus Hiddink.

While Russian clubs are unlikely to be making bids for Lionel Messi or Cristiano Ronaldo any time soon, they have shown that they are able to lure mid-level foreign stars to the country by paying over the odds, as evidenced by Spartak Moscow signing Irish winger Aiden McGeady from Celtic for £9m last year, the Brazilian forwards Welliton and Vagner Love, who play for Spartak and CSKA respectively, or Lokomotiv Moscow buying Scotland international Garry O'Connor for £1.6m in 2006. He now plays for Barnsley.

Zenit hold the record for the most expensive player purchase in Russian league history after shelling out €30m (£25.3m) for Portuguese midfielder Danny in 2008 to lure him away from Dynamo Moscow. He has since been joined by two compatriots at a further cost of €28.8m.

What has changed recently is that teams outside Moscow and St Petersburg have started attracting wealthy backers as well. The lucrative contract with which Terek tempted Gullit is just one example of the cash being spent in unexpected places. Anzhi Makhachkala, a club based in neighbouring Dagestan, which these days is even more chaotic than Chechnya with explosions and shoot-outs almost daily, have also just received a major financial boost after being taken over by a local businessman, Suleyman Kerimov – only a few rungs below Roman Abramovich on the billionaires' ladder.

In Kazan, capital of the oil-rich Tatarstan region, local side Rubin came from nowhere to win the Russian Premier League in 2008 and 2009, going on to have some success in the Champions League – notably when they pulled off a stunning victory over Barcelona at the Nou Camp in 2009.

Most of these clubs are run as vanity projects for the owners rather than successful businesses. Zenit are the only club that can guarantee a full house for every league match, but their stadium holds just 21,000 and they can also rely on the backing of state gas giant Gazprom, which invests heavily in the only major team from the home city of the Prime Minister, Vladimir Putin, and most of the Russian political leadership. It remains to be seen what will happen when, and indeed, if, Uefa implements its Financial Fair Play rules, which mean every club must live within its means.

While Russia and Ukraine are the only former Soviet republics to have produced teams who have made a mark in European competition recently, there have nevertheless been occasional big-name migrations to some of the smaller leagues spawned by the Soviet break-up. After all, it's not just Russia that bred a class of sudden billionaires in the 1990s – all of the 15 new countries have their Abramoviches.

Perhaps the most extraordinary move of all was the former Brazil and Chelsea manager Luiz Felipe Scolari's shock appointment at little-known Bunyodkor in Uzbekistan in 2009. A team only set up in 2005, Bunyodkor is believed to be part of a vast clandestine business empire run by Gulnara Karimova, the glamorous daughter of the Uzbekistan President, Islam Karimov, one of the world's most brutal dictators. Certainly, Bunyodkor were receiving major financial backing from somewhere – in an impoverished country where dissidents are tortured and children as young as seven are forced out of school and into fields to pick cotton, the club was able to give Scolari a contract that reportedly made him the best-paid manager in the world, worth around £12m per year. The club also came mightily close to signing the Internazionale striker Samuel Eto'o, and did manage to obtain the services of legendary Brazilian Rivaldo. Scolari was unable to achieve the target of winning the AFC Champions League, however, and he left the club in May last year.

Spare a thought also for Tony Adams, who last year took the reins at FC Gabala, a new club based in a small town in rural Azerbaijan. A local oligarch has plans for a stunning new stadium and Champions League football within five years – Adams has been brought in to help achieve the unlikely dream. A spokesman for the club last year told The Independent that Adams' salary was "easily comparable" to a top Premier League wage, which was enough to tempt the former Arsenal and England defender to move his family to Gabala, a four-hour drive along bumpy roads from the Azerbaijan capital Baku. With three matches to play his squad, which features 11 nationalities including former Manchester City winger Terry Cooke, are mid-table and unlikely to qualify for European competition.

Back in Russia, the recent fate of Saturn Oblast, a club based just outside Moscow, has shown that while the Russian league has its Chelseas and Manchester Citys, it also has its Portsmouths. In recent weeks, Saturn has declared itself bankrupt, been wound up and excluded from the Premier League for the upcoming season. All the players became free agents and were able to move on elsewhere. Most surprising of all, however, were the details of players' wages, which appeared in several Russian newspapers.

Though during the last months of the club's existence the players received nothing, the contracts they had signed, for amounts up to £1m per year, revealed the kind of sums that are now commonplace in the Russian League. "It shows you why players in Russia might be reluctant to move to other countries in Europe," says Vasily Konov, a Russian football journalist. "Saturn was a small side that never had pretensions to finish near the top of the league and yet their players were on these salaries. They know that nobody in Western Europe would pay them anything like that kind of money."

Despite all the increased money, the better players, and the higher exposure, ordinary Russians do not seem to be responding. During the last season, when Spartak Moscow played CSKA, the biggest derby of the season, the game was shown live on television, but received only a 4 per cent audience share. Attendances are also falling, rather than increasing, and satellite providers are unwilling to fork out large sums of money to win the rights to show games. Even Rubin, on the back of winning successive Russian league championships, last season attracted an average crowd of just 13,000 to their 30,000 capacity stadium. This has not, however, stopped plans going ahead for a new 45,000-capacity stadium, showing that the spending is not necessarily linked to demand.

"If I was given a choice to watch a mid-table game in the Russian Premier League or a similar game in the English Premier League, I'd choose the English one," says Konov. "I just know that the level of football would be higher, so it would be more interesting for me, and I think a lot of other people feel the same."

The Russian football authorities will be hoping that winning the right to host the 2018 World Cup, along with the influx of inspirational figures like Gullit (even if he has so far not proved himself to be a particularly successful manager) will raise the profile of the game among Russians, and get more locals tuning in to Russian games rather than Premier League or La Liga fixtures.

One place where there is real passion about the local team is Grozny, and now they have the money to back it up. A Chechen businessman recently invested in Terek, and before Gullit's appointment, the club's vice-president said they will now be aiming to bid for some top talent. Khaidar Alkhanov added that even the world's very best players were now legitimate targets, so it will be interesting to see who Gullit pursues.

Where the cash comes from does not worry Gullit, though. "I'm not going to occupy myself with politics," he said this week. "I'll concentrate on sport and try and put some pleasure back into people's lives there. I think this region will get much more attention through my going there and that can have a positive effect."

http://www.independent.co.uk/sport/football/european/bloc-party-new-russian-cash-creates-eastern-gold-rush-2204963.html