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* Deal ends four-year shareholder dispute
* Abramovich to buy 7.3 pct stake, worth $2 bln
* Chelsea boss will control 22 pct of Norilsk
* Main owners suspend legal proceedings
* RUSAL shares up 2.4, Norilsk gains 1.5 pct
By Polina Devitt and Donny Kwok
MOSCOW/HONG KONG, Dec 4 (Reuters) - Two Russian billionaires ended a four-year battle over the world's biggest nickel and palladium mine on Tuesday by giving the biggest voting stake in their $30 billion company to Kremlin-favoured tycoon Roman Abramovich.
Norilsk Nickel, which mines the vast mineral deposits of Russia's far north, was one of the biggest prizes handed to insiders in the post-Soviet carve-up of Russian industry that created a generation of oligarchs.
Vladimir Putin, who returned to the presidency in May, has said he wanted an end to a feud between two of Russia's richest men - Vladimir Potanin and Oleg Deripaska - over board control and payments to shareholders in the firm.
Tuesday's deal appears to bear the stamp of the Kremlin, with Abramovich, the well-connected owner of London's Chelsea football club, acting as enforcer to end the dispute.
Potanin and Deripaska agreed that Abramovich would buy a 7.3 percent stake, in the form of treasury stock, at market price. The stake is now worth around $2 billion.
The three parties will each contribute equal stakes, amounting to 22 percent of Norilsk, to an escrow account that will be voted by Abramovich's investment firm Millhouse - giving him the largest say over how the company is run.
"Millhouse will control the compliance with the partnership agreement while voting with this block of shares," Potanin and Deripaska said in a joint statement issued by their firms.
The arrangement reduces the voting power of Potanin's holding company, Interros, now 28 percent, and that of Deripaska's Hong Kong-listed aluminium giant RUSAL, currently 25 percent.
In return, Deripaska will get the higher dividends he has long sought. Potanin - who has controlled Norilsk since he won it in the "loans-for-shares" privatisation scheme he ran as a top official in the 1990s - will be chief executive.
The two sides have suspended legal proceedings. A London arbitration court had been due to open hearings into a case dating back to 2010 in which Deripaska accused Interros, Potanin's investment company, of reneging on a deal to run Norilsk in the interests of all shareholders.
Potanin and Deripaska have been locked in a shareholder dispute since the RUSAL bought a one-quarter stake in Norilsk just before the 2008 global crash in a cash-and-stock deal worth around $14 billion.
The acquisition was meant to herald a merger into an all-Russian major able to compete with global miners such as BHP , but that plan was crushed by the financial crisis.
Loss-making RUSAL is now burdened by $10.7 billion in net debts, greater than its market capitalization of $8.9 billion, and is battling a fall in aluminium prices. Deripaska has resisted parting with the stake in Norilsk, now worth around $7 billion, the lion's share of RUSAL's equity value.
Talks to end the dispute have been on-and-off but sources said in October they had resumed, fuelling speculation that a peace deal was in the works.
Abramovich, the 68th-richest man in the world with a fortune estimated at $12.1 billion by Forbes magazine, is widely viewed as having among the strongest Kremlin ties of Russia's oligarchs.
Now a co-owner of FTSE 100-listed steel firm Evraz, Abramovich won control of oil firm Sibneft after its privatisation in the 1990s. He sold Sibneft in 2005 to Gazprom , the state gas export monopoly, for $13 billion.
Russia's richest man, Alisher Usmanov, whose Metalloinvest owns a 4 percent stake in Norilsk, has in the past tried to mediate between the Norilsk shareholders.
RUSAL said in an earlier statement that the deal would ensure that Norilsk pays stable dividends for the years 2012-2014. Shareholders agreed that Norilsk will pay at least 50 percent of its annual net income as dividend, said a source close to one of shareholders.
Deripaska never won a real say on the Norilsk board and instead was overruled by Potanin, who launched a series of share buybacks with the backing of company management.
Norilsk will cancel the rest of its treasury shares - amounting to about 10 percent. Interros and Norilsk are not to sell shares for five years and Millhouse is not to sell for three years under a lock-up agreement.
Shares of RUSAL gained 2.4 percent to HK$4.64 in Hong Kong, outperforming a flat broader market, but much lower than its 2010 IPO price of HK$10.80.
Norilsk shares gained 1.5 percent in Moscow to 4,884 roubles, bringing gains since mid-November to over 8 percent.
No comment was available from Millhouse.