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Last Updated: Wednesday, 29 October, 2003, 12:09 GMT
Key Kremlin figure 'quits'
Alexander Voloshin, Kremlin chief of staff
Voloshin dates back to Yeltsin era
The Kremlin's chief-of-staff has resigned, Russian newspapers reported on Wednesday, suggesting hardliners may be strengthening their position.

Chief-of-staff Alexander Voloshin is seen as a member of the Kremlin's old guard - not among the powerful incomers appointed by President Vladimir Putin.

His reported resignation is being linked to the storm over the arrest of Russia's richest man, Mikhail Khodorkovsy, at the weekend.

Mr Voloshin is seen as a pro-business figure who has strong sympathies with the tycoon and his Yukos oil empire.

Those who say this do not have official information
Alexei Gromov
Presidential press spokesman.
In a separate move, prosecutors asked a court to annul the election to parliament of a major Yukos shareholder, Vasily Shakhnovsky, which would remove his current immunity from tax evasion charges.

That development was enough to drive down the price of Yukos shares by 8% in early trading on Wednesday. Prices had already taken a battering earlier in the week before recovering on Tuesday.

The reports of Mr Voloshin's resignation were carried in several Russian newspapers.

The daily Vedemosti quoted sources close to the Kremlin as saying Mr Putin had accepted his chief-of-staff's resignation.

This will increase instability and an imbalance between influential groups in the Kremlin
Liliya Shevtsova
Think-tank analyst
Mr Voloshin was furious that the president had not informed him of Mr Khodorkovsky's imminent arrest, the paper said.

Kommersant business daily said that a formal announcement about Mr Voloshin's departure would not be made for several days until his replacement had been found.

Kremlin media officials have not confirmed the reports.

"If this were the case the press service would have announced it. Those who say this do not have official information," said presidential spokesman Alexei Gromov.

Mr Khodorkovsky remains in custody accused of fraud and tax evasion.

Critics say his detention is more likely to be related to his involvement in Russian politics than to criminal allegations.

Old versus new

The decision to move against him was seen by observers as a possible sign that Mr Putin's hawkish hardliners were winning an internal Kremlin battle with the softer old guard.

Putin is accused of reverting to security service methods
Mr Putin, himself a former KGB spy, has given many top jobs to officials from the security and military worlds.

But Mr Voloshin's appointment to the Kremlin dates back to the Boris Yeltsin era - making him a member of a group sometimes called the "family", whose influence is believed to be waning.

Analysts say if he has resigned as reported, it will have a big impact on Kremlin power politics.

"This will increase instability and an imbalance between influential groups in the Kremlin," said Liliya Shevtsova of the Carnegie Endowment think-tank.

Assuming Voloshin's departure is confirmed today, this will only underline the seriousness of the political crisis
United Financial Group research note
"However, it is necessary to get rid of the Yeltsin-era elite which created the conditions for oligarch-dominated business and a corrupt bureaucracy."

Confirmation of his resignation could cause further nervousness among investors.

"This will only underline the seriousness of the political crisis resulting from Putin's decision to deal with the political problem of Khodorkovsky using KGB methods," said a research note from the United Financial Group.

Mr Voloshin's resignation would leave Prime Minister Mikhail Kasyanov among the last prominent survivors of the Yeltsin "family" clan.

Analysis: The Yukos puzzle
27 Oct 03  |  Europe
Putin stands firm on tycoon arrest
27 Oct 03  |  Business
Russian tycoon faces new charge
28 Jul 03  |  Europe
Profile: Mikhail Khodorkovsky
25 Oct 03  |  Business

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