[Disclaimer: I know, if you know anything about crypto you're probably about to tell me why I'm doing it wrong - I've done enough Googling to know this seems to be the typical response.]
Suppose the following: you have a central authority that wants to issue login cookies for a given domain. On this domain, you don't necessarily trust everyone, but you have a few key end-points who should be able to read the cookie. I say a few, but in practice this number of "trusted" partners may be large. The cookie doesn't contain much information - a username, a timestamp, an expiry, a random number. It should remain small of course, for performance reasons, even after encryption (within reason). Now, there are two security issues:
1) We don't trust every webserver on this domain with user data. For this reason, the ability to read the cookie should be restricted to these trusted partners. 2) While we trust these partners to protect our user's data, we'd still like the central point of authority to be unforgeable (again, within reason).
Now, if we generate a private RSA key for the authority and keep it secret, and distribute the public key only to the "trusted partners", we should be able to encrypt with the private key and have it readable by anyone with the public key. What I'm unclear on is, would it still be necessary to sign the message, or would the act of decrypting be evidence that it was generated with the private key? Is this any way in which this scheme would be better or worse than disseminating a symmetric key to all parties involved and using that to encrypt, while using the private key merely to sign? And of course feel free to tell me all the ways this is a stupid idea, but bear in mind that practical arguments will probably be more convincing than rehashing Alice and Bob.
Oh, and implementation pointers would be welcome, though one can find the basics on Google, if there are any "gotchas" involved that would be useful!
The answer to your question "would the act of decrypting be evidence that it was generated with the private key", the answer is yes if the recipient can do simple validation of the data. Say you have "User name : John, timestamp : <number>, expiry : dd/mm/yyyy". Now if a wrong public key is used to decrypt, the probability that you will get "User name : <some letters>, timestamp : <only numbers>, expiry : ??/??/????" is zero. You can validate using a regular expression (regex) like "User name : [a-zA-Z]+, timestamp : [0-9]+, expiry : .... " and drop it validation fails. You can even check if the day is between 1 and 31, month is between 1 and 12 but you won't get to use it as regex will typically fail at "User name : " if wrong public key is used. If validation succeeds you still have to check the timestamp and ensure that you don't have a replay attack.
However, consider the following:
If you still want to use this approach, and are able to distribute the public key only to the "trusted partners", you should generate a random session key (i.e. symmetric key), encrypt it using the private key and send to all recipients who have the public key. You then encrypt the cookie using the session key. You can change the session key periodically. More infrequently you can change the public key also: you can generate a new public/private key pair and encrypt public key with the session key and send it to all recipients.
You should use a digital sigantures scheme of some sort, or some other mechanism that is aimed to solve the integrity problem of your scenario.
The encryption itself isn't enough. How would you know that the decrypted messege is what it should be? Decrypting a cookie encrypted with the right key will surely provide a "valid" cookie, but what happens when you decrypt a cookie encrypted with the wrong key? or just some meaningless data? well, you might just get a cookie that looks valid! (the timestamps are in the range you consider valid, the username is legal, the random number is... uh... a number, etc.).
In most asymmetric encryption algorithms I know off, there is no built-in validation. That means that decrypting a message with the wrong key will not "fail" - it will only give you a wrong plaintext, which you must distinguish from a valid plaintext. This is where integrity comes to play, most commonly - using digital signatures.
BTW, RSA is long studied and has several "gotchas", so if you plan to implement it from scratch you better read ahead on how to avoid creating "relatively easy to break" keys.
Nate Lawson explains here and here why you can't securely use the public key as a closely-held secret decryption key (it's a subtle point, and a mistake plenty of others have made before you, so don't feel bad!).
Just use your public key to sign for authenticity, and a separate symmetric key for the secrecy.
I've read enough on interesting attacks against public key systems, and RSA in particular, that I agree absolutely with this conclusion:
(That means: Encrypt with the public key, sign with the private key, and anything else is playing with fire.)
Addendum:
If you're interesting in reducing the size of the resulting cookies, you should consider using ECDSA rather than RSA to produce the signatures - ECDSA signatures are considerably smaller than RSA signatures of an equivalent security factor.
As an alternative to your key distribution approach, which may or may not be suitable in your application, consider using Kerberos, which uses symmetric key encryption, a single highly protected bastion server that controls all the keying material, and a clever set of protocols (See the Needham-Schroder protocol)
In cryptography you are what you know. In your scenario, you have a central authority which is able to issue your cookies, and you want no other entity to be able to do the same. So the central authority must "know" some private data. Also, you want the "trusted web servers" to be able to access the contents of the cookies, and you do not want just anybody do read the cookies. Thus, the "trusted web servers" must also have their own private data.
The normal way would be that the authority applies a digital signature on the cookies, and that the cookies are encrypted with a key known to the trusted web servers. What your are thinking about looks like this:
Although such a scheme may work, I see the following problems in it:
The problem of ensuring confidentiality and verifiable integrity in the same type is currently being studied. You may look up signcryption. There is no established standard yet.
Basically I think you will be happier with a more classical design, with digital signatures used only for signing, and (symmetric or asymmetric) encryption for the confidentiality part. This will allow you to use existing libraries, with the least possible homemade code.
For the signature part, you may want to use DSA or ECDSA: they yield much shorter signatures (typically 320 bits for a DSA signature of security equivalent to a 1024-bit RSA signature). From the central authority point of view, ECDSA also allows better performance: on my PC, using a single core, OpenSSL crunches out more than 6500 ECDSA signatures per second (in the P-192 NIST curve) and "only" 1145 RSA signatures per second (with a 1024-bit key). The ECDSA signatures consist in two 192-bit integers, i.e. 384 bits to encode, while the RSA signatures are 1024-bit long. ECDSA in P-192 is considered at least as strong, and probably stronger, than RSA-1024.
I presume you trust the 'trusted partners' to decrypt and verify the cookie, but don't want them to be able to generate their own cookies? If that's not a problem, you can use a much simpler system: Distribute a secret key to all parties, and use that to both encrypt the cookie and generate an HMAC for it. No need for public key crypto, no need for multiple keys.