British financier Nathaniel Rothschild, a close friend of shadow chancellor George Osborne and an acquaintance of Deripaska, said in his letter that Osborne and the Conservative Party's chief fundraiser Andrew Feldman were guests on Deripaska's luxury yacht in Corfu this summer.
Osborne said a 50,000 pound ($85,000) donation to the Conservative Party was discussed, and that Feldman had suggested channeling the money through one of Deripaska's U.K. based companies.
Donations to political parties from non-residents are banned under British law.
The Conservative Party has denied the report, while admitting that the officials were guests on Deripaska's yacht. The party said that Rothschild had approached them at a later date with an offer of money from the billionaire, but that the suggestion had been turned down.
The letter follows a controversy that emerged last week over Business Secretary Peter Mandelson's links with Deripaska.
The British cabinet minister was also a guest on Deripaska's yacht during the summer, and had met him for dinner in Moscow several times during his time as European trade commissioner.
The Conservatives had demanded that Mandelson provide full details of his links to the oligarch, to avoid "the perception of any possible conflict of interest," while the Liberal Democrats suggested he had been using his connections as trade commissioner to secure lucrative personal connections.
The letter from Rothschild, who is also a close acquaintance of Mandelson, came as a surprise given his former involvement in Tory fundraising.
Oleg Deripaska, 40, is the owner of the industrial holding Basic Element (BasEl). The Kremlin-friendly oligarch was ranked by Forbes magazine as the world's ninth richest person in May, with a fortune of $28 billion.
However, reports in financial media have said that Deripaska may have lost a large share of his wealth with the plummeting Russia stock market, which has lost around two-thirds of its value since the May high-point.