In Foreign Parts: Steve Crawshaw in Moscow

Take Tolstoy's description of the gala ball attended by an awed Natasha Rostov in War and Peace.

"Those brilliantly lighted rooms – the music, the flowers, the dances, the emperor, all the dazzling people of Petersburg. The prospect was so splendid that she could hardly believe it would come true."

Then double it, and double again. When describing the White Nights ball held in the Catherine Palace outside St Petersburg last weekend – less than 10 years since the collapse of Communism – no hyperbole seems to do justice to this bizarre new event in the Russian social calendar.

The scenes in the huge Throne Room at the magnificent 18th-century palace, designed by Bartolomeo Rastrelli for the Empress Catherine II, are opulent beyond all imagination. They seem to come not just from a different world, but from a different universe to the one inhabited by ordinary mortals in beautiful but mostly scruffy Petersburg – let alone the rest of this huge country.

As one guidebook notes: "The sensation of being in the Throne Room is incomparable. In imperial days, during a gala ball hosted by the Tsar, with hundreds of candles, magnificent music, and the opulence of the court, the experience of being in the room must have overwhelmed the senses."

It again does. Beneath the huge Venetian ceiling paintings, 700 lamps shine out from chandeliers in a room where everything gleams gold – a gold reflected and amplified by huge mirrors between the windows that look out on to Alexander Park. The tables are piled high with rich bouquets; there is a swirling of black and scarlet silk and satin and the flash of brilliant diamonds, as the guests – the country's political, artistic, and business élite – search out each other in one great social whirl. We enter the palace – whose windows, just before midnight on one of Petersburg's famous white nights, blaze crimson with the reflection of the not-quite setting sun – moving through sweeping lawns along a path flanked by blazing torches and footmen in blue tricorn hats and scarlet breeches. Up the sweeping marble staircase and into the Throne Room, where dinner includes, naturally, copious amounts of caviar, vodka and champagne.

During dinner, music and dancing is performed by leading members of the Kirov (as the opera and ballet company is still known abroad; at home, it has returned to its pre- revolutionary name, the Mariinsky Theatre).

And, at the centre of all this, the guest of honour. To quote War and Peace again: "There was a sudden stir: a whisper ran through the assembly, which pressed forward and back, separating into two rows down the middle of which walked the Emperor to the strains of the orchestra, which struck up at once."

When Vladimir Putin arrived with his guests, the entire ballroom rose to its feet for an ovation. As at Natasha Rostov's ball, "several persons dashed backwards and forwards, their faces transformed".

"Nash prezident! Our president!" one woman murmured in adoring tones. Large men wearing small earpieces look warily around the room, as Vladimir and Lyudmila Putin sat down at their table with Valery Gergiev, chief conductor of the Mariinsky Theatre; then the assembled guests returned cheerfully to their caviar. The irony that Mr Putin, former dedicated Communist, is guest of honour at such a money-money-money occasion is clear. He himself is quite unbothered; he embraces the new exclusivity with enthusiasm. The former KGB boss makes a point of going to the next table to pay his respects to Prince Michael of Kent, a multiple relative of the tsars. (Prince Michael's grandfather on his father's side, George V, was first cousin of Russia's last tsar, Nicholas II, and of Nicholas's wife, Alexandra.)

Admittedly, few of the guests at the ball were quite so royal; blue blood was not compulsory. None the less, the company was alarmingly distinguished. Those at my table included a senior adviser to the President, the editor of a literary weekly and an opera conductor. On other tables there werea clutch of ministers, past and present, and leading businessmen. Network, network, network was one of the rules of the night. After fireworks, jazz and more dancing, the ball finally started to wind down after 4am.

Money raised was to go towards the restoration of the Mariinsky theatre library, which includes newly rediscovered Strauss waltzes (performed on the night, naturally, by the Kirov orchestra).

These good intentions would be unlikely to impress most Russians, it must be said. The pricetag for this stupefying affair was £400 a head – more than two months' salary for the great majority of Russians and six months' wages for the poor.

For many at the ball, by contrast, such amounts are a mere bauble. Rich Russians are (as exclusive London estate agents and independent schools all over Britain have discovered) very rich indeed. For much of the past decade in Russia, the rich-get-richer and poor-get-poorer rule has seemed to apply with unique force.

The nouveaux riches have often liked to prove how wealthy they are. One Moscow acquaintance described her experience when asked to sell tickets for grand occasions. "People complained if the tickets cost too little. They would say, 'If it's only $300, it can't be worth going to'."

Most famous of all are the oligarchs; the handful of men who during Russia's chaotic privatisation in the mid-1990s became billionaires – private jets, money no object, mansions scattered across Europe and the rest of the world. Less individually well known have been the Seriously Rich, who drive around in their darkened BMWs or four-wheel-drives, with leather-jacketed heavies to look after them, adoring their own extravagance and indulging a live-hard, scam-hard, die-early mentality.

Such people are still easy to find in Russia today. Equally, however, thuggery and thievery is no longer the only rule for transacting business. A contract, a handshake and even a court of law have all at last gained some validity. The result is a more widespread sense of belief that things might one day work. Admittedly, the White Nights ball is a deeply abnormal event. Andrei Illarionov, the Kremlin economics adviser I sat next to at dinner, spoke (as he is paid to) of how things are getting better. "The only problem is that we Russians all live so well," he said drily, waving a hand in the direction of the white-gloved waiter who was refilling our glasses of champagne at the time.

But he also argued, more seriously, that in 10 years the gap will be much smaller. Above all, he suggested, it was important to build a European country – to bring Russia back to Europe.

It is a daunting task, but it is not all just talk. It is possible to glimpse signs of almost- normality in Russia. That still seems unbelievable. But there have been many unbelievable changes in past years.

Through much of the 1990s, the emergence of a sane economy seemed unthinkable. The financial collapse of 1998 appeared to spell death for reforms. Today, however, it has come to seem the beginning of a path to possible recovery.

You can find new optimism in all sorts of odd nooks and crannies. At the éite Plekhanov economics academy in Moscow it was perhaps not surprising to find that students felt optimistic that Russia would be more stable and prosperous in the years to come. In the words of Sergei, aged 22: "People have started to understand that you can't get everything with guns – you need to use your brains."

Elsewhere, too, you can find surprising signs of change. In Ekaterinburg in the Urals this week a newspaper seller seemed startled when I asked her whether things were looking better or worse than before. "Things are better than five years ago – of course they are. Much better. How could you not feel optimistic today?"

Many people at last weekend's ball arrived without bodyguards. Now, there's a change. Rich Russians without accompanying gorillas – whatever next? It must be a revolution.