An interesting problem.
The broader goal is to setup a directory that one of our clients can sftp into (via ssh keys, not user/pass combination) and upload files. This directory will need to be accessed by another cPanel user (called user1) running crons which are in-turn running php scripts to handle these files and act on them (reading, and possibly moving).
I have setup a new user (called user2) with it's home directory in a sub directory of user1. I am able to sftp into the home directory of user2 using a username / password combination. But I am now unable to connect using ssh keys. I have setup the ~/.shh/authorized_keys file and everything for user2. From what I understand the issue is due to file ownership. As user2 doesn't explicitly own the files in ~/.ssh it refuses to look in the file and therefore refuses the key.
Does anyone have any experience, advice or suggestions to working this out. Even if my initial solution isn't feasible and I have to go down another path.