ROME (Reuters) -The Italian government ordered on Friday the seizure of a luxury yacht worth some $700 million that has been linked in the media to Russian President Vladimir Putin.

       The sleek, six-deck Scheherazade had been undergoing repairs in the Italian port of Marina di Carrara since September, but recent activity at the dockside suggested that the crew might be preparing to put to sea.

       The Italian finance ministry said in a statement that investigations showed the owner of the boat had ties to "prominent elements of the Russian government" and with people targeted by European Union sanctions.

       The Scheherazade has two helicopter landing pads and can host up to 18 guests and 40 crew. Its owner has never been publicly identified, but there have been insistent rumours that it belongs to Putin or a member of his inner circle.

       A source with direct knowledge of the investigation into the vessel said Italian police believed the owner was Eduard Khudainatov, the former chief of Russian energy giant Rosneft who is not currently a target of EU sanctions.

       The finance ministry did not name the owner, but said it had asked the European Union to add the person to the sanctions list and had ordered the yacht to be seized pending a decision.

       (Reporting by Crispian Balmer and Emilio Parodi;Editing by Chris Reese and Sandra Maler)