The Foreign, Commonwealth and Development Office (FCDO) told the BBC its officials are in talks with Abramovich’s representatives.

But multiple sources said there have been no meetings between any Labour ministers and members of the foundation set up to oversee the funds since the general election last year.

Sources close to the foundation said there was a deadlock and a political decision by a minister is needed to negotiate and sign off an agreement that can break the impasse.

One source said: “For three years, the government has been saying it’s been working very hard to release the money. But they are not having meetings with the foundation. There has been no meeting with a minister since Labour took over, for example.”

The BBC understands the FCDO has acknowledged a request for a meeting between the foundation’s board and Foreign Secretary David Lammy.

Abramovich’s representatives did not wish to comment, but those with knowledge of the situation acknowledged little contact or progress had been made on releasing the funds under the four prime ministers to have held power since the sale of the club.

The issue has taken on new urgency after Prime Minister Sir Keir Starmer announced that part of the UK’s overseas aid budget was being diverted to defence. In 2024/25, the UK is sending £282m in aid to Ukraine.

The £2.5bn – and the interest accrued on the funds – would make up for some of money taken from the aid budget, which was £15.3bn in 2023.

Alison Griffin, of charity Save the Children, said: “This money has been sitting gathering dust – and interest – when it could and should have been spent helping the children of Ukraine cope with the horrors of a full-scale war that has lasted over three years.”

The delay in releasing the funds centres on a disagreement between the UK government and Abramovich’s lawyers.

Abramovich was granted a special licence to sell Chelsea, providing he could prove he would not benefit from the sale.

At the time, Abramovich said proceeds from the sale would be donated via a foundation “for the benefit of all victims of the war in Ukraine”, and his position has not changed.

Abramovich – a Russian billionaire who made his fortune in oil and gas – cannot access the £2.5bn under UK sanctions but the money still legally belongs to him.

He is alleged to have strong ties to Russian President Vladimir Putin, something he has denied.

Sources said Abramovich’s lawyers have insisted on using the money for all victims of the war in Ukraine including those outside the country, but the UK government has pushed back and argued the funds should only be spent on humanitarian efforts inside the war-torn country.

Portugal has also had a say in the matter because Abramovich has Portuguese citizenship and has been sanctioned by the EU.