Bound by the Caucasus mountains and the Black Sea and fought over for centuries by Russians, Turks and Persians, Georgia is a land of legends. The old myths include tales of a good ruler usurped by an evil pretender, and a cruel king toppled by a brave adventurer. Some see a similar story unfolding again now, but Georgians disagree about who is the hero and who is the villain in the current battle to control their country.

The adversaries in this saga are known to Georgians simply as Misha and Bidzina.

Mikheil "Misha" Saakashvili (45) was hailed as the champion of democracy in the Caucasus when he ousted Georgia's Soviet-era old guard in the 2003 Rose Revolution. Misha crushed petty corruption and streamlined the tax system and bureaucracy to make Georgia the easiest place to do business in the volatile and strategic Black Sea area. Misha's vow to lead Georgia out of Russia's grip and towards the EU and Nato made him a darling of the West.

But with time, the simple, rosy narrative became murkier. Problems befell politicians and media outlets that criticised Misha, and people noticed that businesses seemed to do better if closely linked to his party, the United National Movement (UNM). In 2007, riot police used extreme violence to break up anti-government protests, and a year later Saakashvili led Georgia into a disastrous five-day war with Russia. For many Georgians, post-Rose Revolution hope became loathing for a regime that seemed increasingly corrupt, violent and paranoid, and justified its excesses by citing the need to neutralise numerous alleged Russian-backed plots to topple Misha.

Enter Bidzina Ivanishvili (57), the factory worker's son from the village of Chorvila, who studied in Russia before plunging into its wild and often dangerous 1990s business world. Calling himself Boris rather than Bidzina, he invested in everything from computers to banks to pharmacies and became Georgia's richest man; last year, Forbes put his wealth at $6.4 billion (€4.8bn).

Bidzina was an enigma in his homeland. After leaving Russia, he lived for several years in Paris and back in Chorvila, as well as in a sprawling glass-and-steel complex overlooking Tbilisi that resembles a Bond villain’s lair.

He spent hundreds of millions of euros on artwork by the likes of Picasso, Henry Moore and Damien Hirst, and similarly vast sums building and renovating houses, schools and hospitals, and supporting theatres and churches around Georgia. He even bankrolled some of Misha’s early reforms when hopes were high and funds were low.

But Bidzina always shunned publicity and politics. That’s why Georgians were stunned when he stepped out of the shadows to form a party and run for prime minister last year.

He said Misha had co-opted so much power and so thoroughly crushed the opposition, that only a person of exceptional personal wealth and independence could stand against him. In other words, only he could save Georgia.

Confounding most predictions, Bidzina’s new Georgian Dream coalition beat Misha’s UNM in last October’s elections, and he became prime minister in Georgia’s first peaceful and democratic handover of power.

The campaign was poisonous: Ivanishvili was accused of being a Kremlin puppet and had his Georgian citizenship revoked and assets seized, and his supporters complained of harassment and intimidation; the UNM’s defeat was sealed by the release of graphic videos showing prisoners being tortured in Georgian jails.

Powers transferred
Nine months of "cohabitation" between Bidzina and Misha have been just as bruising. Parliament has transferred many of the president's powers to the prime minister, slashed the money Misha can spend on everything from lighting the presidential palace to paying US lobbyists, and, most controversially, prosecutors have pressed charges against top UNM members, including former ministers.

Bidzina calls this a long overdue drive to clean out top-level corruption; Misha calls it a political purge by an oligarch with suspicious ties to Russia; and the West looks on askance and wonders what is happening to its golden child in the Caucasus.

“The restoration of justice in Georgia is an ongoing process,” Ivanishvili said in a recent interview at his compound beside the Black Sea. “There is no more violence, no more illegal detentions, businesses are no longer controlled, the media is free, elite corruption is gone, there are no more lies coming from the government and the budget is targeted towards the social needs of the country.”

On a Saturday afternoon, Bidzina had just met cabinet ministers on his vast seaside estate, where several low, modernist villas sit in thickly wooded grounds that he and his staff traverse on golf carts.

The previous day, senior EU officials had told Ivanishvili they were satisfied with Georgia’s progress towards its anticipated initialling of a landmark trade and political pact with Brussels in November – despite Misha’s claims of persecution.

“Their statements show that Europe is being convinced when we say we are a sincere and honest government that completely follows the law. We are doing our very best to govern the country in a European way,” Ivanishvili said.

The premier – a small, trim man known for a daily regime of yoga and carrot juice – is as different physically to the burly bon viveur Saakashvili as he is politically.

“It’s very difficult, very heavy,” Bidzina said of his relationship with Misha. “He is incapable of constructive dialogue. He says black is white and white is black.”

Giga Bokeria, a close ally of Saakashvili and secretary of Georgia’s national security council, confirmed that relations between the leaders are “just as bad as they appear to be”.

Bokeria accuses Ivanishvili of running the government like a “one-man show”, that his whimsical and inconsistent policies are damaging investor confidence in Georgia, and that he believes those who challenge him are liars who must be sidelined, using the courts if necessary.

Plan to leave politics
He is particularly worried by Bidzina's pledge to leave politics soon and concentrate on work in civil society. He may even resign this year, after elections to replace Saakashvili in October. "He plans to withdraw from his official post . . . and stay as Don Corleone outside without any accountability and with a puppet president and prime minister, and with every party weak. That's why he wants to destroy the UNM," Bokeria said. "It is the dream of the 1990s Russian oligarch – to be behind the scenes pulling the strings with no responsibility."

Bidzina says he “gets no joy from politics” and insists he is building a system of government that will soon be able to cope without him. “I am not running from responsibility but going into civil society, a tougher area where I am needed more . . . I am planning at least 20 more active years, and in that time I want to build a typical European-style society in Georgia.”

History will correctly allot the roles of hero and villain to Misha and Bidzina. But for now, it seems only the billionaire prime minister, like a benevolent king of legend, can hope to grant the wishes of his people.

“Whatever the country needs, I have an obligation to help it,” Ivanishvili said. “I will always have that desire.”