* UK Takeover Panel reviewing whether deal triggers mandatory takeover - sources
* No timetable, but decision expected "sooner rather than later" - sources
* Prokhorov stake in Polyus Gold worth $3.6 billion at Wednesday's close
* Polyus shares close up almost 10 percent (Adds source details, background, shares)
By Douglas Busvine and Clara Ferreira-Marques
MOSCOW/LONDON, Jan 24 Billionaire Mikhail Prokhorov is close to selling his 38 percent stake in Russia's largest gold miner, Polyus Gold, in a complex deal currently being reviewed by British regulators, sources familiar with the matter said on Thursday.
A sale, months in the works and long debated, could transform the ownership structure of Russia's largest miner, as the industry battles the challenge of unlocking Russia's mineral wealth and some of the world's most promising resources, in a political climate which has failed to attract foreign players.
It has also already revived speculation of a combination of Polyus with rival Russian gold miner Polymetal, despite misgivings among many in the industry.
Both Polyus and Polymetal outperformed the London-listed sector on Thursday, with Polyus ending up 9.7 percent.
"The majority shareholders in Polyus Gold and Polymetal have a history of cooperating and merging mutual and complimentary industrial assets," Citi analysts said in a note on Thursday on the potential stake sale, quoting a potash merger which involved leading shareholders in Polyus and Polymetal.
However the deal itself, which the sources said could involve assets as well as cash, hinges on Britain's regulators.
Prokhorov owns the Polyus stake through holding Onexim. Polyus had said in September that Onexim was in talks with two potential buyers over the stake, worth around $3.6 billion at current market prices, but gave no details.
The sources did not disclose the prospective buyers on Thursday, but their identity and relationship will be key to any sale and are already the centre of investigations underway by Britain's Takeover Panel.
If the buyers are found to be acting "in concert" - either acting together amongst themselves or with Polyus' other main shareholder, Suleiman Kerimov - the sale of Prokhorov's 38 percent stake, even to multiple buyers, would be considered above Britain's 30 percent threshold and trigger a full mandatory takeover offer.
That, the sources said, would likely scupper the deal.
"The question of whether they are acting in concert with Kerimov or not is the pivotal question. That is what the panel needs to take a view on," said one of the sources, who has direct knowledge of the deal.
"If the panel rules they are related parties, I doubt we will have a deal."
Kerimov, a billionaire from the north Caucasus and owner of Russian soccer club Anzhi Makhachkala, holds 40 percent of Polyus through his company Nafta Moskva. In September, the company said it was in talks to finance a would-be buyer for the Onexim shares, but was not interested in the stake for itself.
Talk of a sale back then, however, had prompted talk of an all-Russian alliance at Polyus involving Kerimov, whose company is expected to support shareholders that share his strategic preferences.
If finalised, the deal also signals a shift for businessman-turned-politician Prokhorov and an abandonment of his efforts to use Polyus as a platform for an international merger, as global gold miners languish in relation to bullion prices that have soared in the past decade.
Prokhorov, owner of the Brooklyn Nets basketball team in the United States, ran in last year's Russian presidential election, placing third behind Vladimir Putin. He has since founded a liberal opposition party, Civil Platform.
"Prokhorov needs to get out of business to pursue his political career," said a second source familiar with the prospective deal.
Polyus obtained a London listing last June, a step toward inclusion in the FTSE 100 index that Prokhorov had hoped would give the company a liquid acquisition currency for a major international merger. But the company has since suffered from low liquidity.
"I am doubtful a deal is imminent, but I would like to think it will be sooner rather than later," the first source said.
Representatives of Onexim, Polyus and Prokhorov declined to comment. (Reporting by Douglas Busvine and Clara Ferreira-Marques; Additional reporting and writing by Megan Davies; Editing by Tim Dobbyn)