The billionaire, the £10m house renovation - and the lawsuit

The project was the renovation of two houses with one of London's most sought-after postcodes. Money, it is claimed, was no object. All that mattered was that the properties in the heart of Hampstead, belonging to one of the Israel's richest men, should be filled with artworks of the highest quality by the most bankable artists.

But the High Court will be told today that the result was an extraordinary falling-out between the billionaire and the interior designer employed to complete the £10m renovation of two neighbouring houses.

Moshe Bachar, who has made his living refurbishing the homes of Israel's jet set for 12 years, is being sued by his employer after he received commissions worth £1m on the art collection built up from galleries and dealers across the world over three months from September 1999. The employer will be revealed in the High Court today as Erwin Eisenberg, whose family disputes and corporate empire, ranging from arms deals to oil refineries, made him Israel's most famous entrepreneur.

Mr Eisenberg, 52, claims the commissions of up to 20 per cent received by Mr Bachar were gained without his knowledge and were contrary to the designer's assurances that he received no such payments from suppliers or contractors.

Mr Bachar, 40, is claiming that the billionaire not only knew of the payments and authorised them but attempted to avoid import duties on the furnishing for his Hampstead residence and made a death threat against the designer.

All the allegations against Mr Eisenberg are denied by him.

Mr Bachar said: "I was asked by Mr Eisenberg to help him acquire these art works. I took only the normal commission offered by dealers and galleries. It is common practice. I mentioned this on several occasions to Mr Eisenberg and he made it clear he did not mind. Indeed, he was very pleased with the finished result. Then, without warning, I am accused of dishonesty."

By any standards, the art collection was fit for a billionaire's pied-à-terre. Costing £6.7m, it comprised 25 paintings and sculptures by some of modern art's leading figures. Alongside paintings by American artists including Robert Rauschenberg and Franz Kline, there were sculptures by the leading Britons Antony Gormley and Anish Kapoor.

The collection, which included a collage by Picasso and a drawing of a nude by Matisse, was to be installed in two houses in Well Road, Hampstead, which Mr Bachar was hired in July 1999 to renovate at a total cost of £10m, including the art. The designer says Mr Eisenberg told him: "I don't care about the money. Let it cost what it costs."