Dmitri Kovtun has told lawyers for the inquiry "that he is willing to take part in the inquiry and in particular to give evidence via video-link," said Robin Tam, counsel at the hearings.
"He has also recently indicated that he wishes to apply for core participant status," he told the public inquiry's chairman Robert Owen, adding that he was in favour of granting the request.
Owen said it was "highly regrettable that it is so late in the day that this approach and application from Dmitri Kovtun has been made".
Both men are in Russia, which has refused to extradite them, accusing Britain of conducting a politically biased investigation.
Kovtun and Lugovoi had previously refused to play any part in the inquiry, which is looking into possible Russian state involvement in the murder.
Owen added that he shared concerns voiced by a lawyer for Scotland Yard over what was behind Kovtun's change of heart but neither elaborated further.
Ben Emmerson, lawyer for Litvinenko's widow Marina, said that he should have the right to question Kovtun in the video-link.
A report with the inquiry's findings is due to be published by the end of the year.
Litvinenko died in a London hospital on November 23, 2006, three weeks after meeting Kovtun and Lugovoi.
In a letter dictated from his deathbed, he accused Russian President Vladimir Putin of having ordered his murder.
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