Russia in turmoil: Noiseless ascent of a spy into heart of the Kremlin

UNTIL LAST year, no one had heard of Vladimir Putin. He was a backroom boy with 17 solid years behind him in the security services, including a stint as a Soviet spy in East Germany. Few had noticed his noiseless ascent to the heart of the Kremlin.

Even after he was appointed to head the Federal Security Service, the new KGB, last July and began to appear in the headlines, he was rarely seen as a popular leader, let alone a future president. Quiet, sandy-haired and ferrety, he seemed more spook than showman.

But yesterday, after throwing out his fourth prime minister in 18 months, Boris Yeltsin was categoric. He not only named Mr Putin as premier but - to widespread astonishment - as his chosen heir to the Kremlin. Speaking on TV, a distant and rigid figure amid his gilded Kremlin furnishings, the President declared that Mr Putin was the man he saw as "capable of consolidating society" and "guaranteeing the course of reforms in Russia".

Soon afterwards, the 47-year-old Mr Putin confirmed that he would run. It speaks volumes about Russian politics - from the absence of a party system to the ruling elite's brazen disregard for the electorate - that the announcement was taken so seriously. Endorsement by a profoundly unpopular, ill and mentally erratic President ought to be the kiss of death. But what matters in Russia is power.

Such is the fluid nature of Russian politics that the last two premiers rose swiftly from obscurity to a place on the shortlist for president once they were in the public eye. Thus, NTV television - no fan of Mr Yeltsin's - described the announcement as "historic".

But why did Mr Yeltsin choose Mr Putin, and why now, with a year to go before the presidential elections are due? The first reason is his job at the FSB.No one better understands how to hold on to power than Boris Yeltsin and no one is more acutely aware that the first rule of doing so is to maintain control over the security apparatus. The last two prime ministers were Yevgeny Primakov, a former head of foreign intelligence, and Sergei Stepashin, ex-chief of domestic intelligence. Mr Putin is part of that pattern, and is tailored to see Mr Yeltsin through the rocky period of transferring power next year.

This is an issue of acute importance to Mr Yeltsin, the "family" who advise him - including his daughter, Tatyana - and the larger circle of businessmen and politicians who have acquired their power and suspect fortunes during his eight years in the Kremlin. The defining factor in the battle over the presidency is the determination of today's ruling elite to ensure Mr Yeltsin's successor protects their interests.

The security services would play a key part in any investigation into the wildly corrupt mass privatisation process, as well as the welter of other allegations that ceaselessly flow around Moscow. For those made rich by the post-Soviet era, keeping the FSB onside is critical. Some have a specific self-interest: hanging in the air are allegations that senior presidential staff took bribes in return for fat building contracts. With Mr Putin in charge, they will hope that the scandal can be forgotten. "Putin is tougher than Stepashin and has the support of the security organs," said Moskovskiye Novosti newspaper, which - remarkably - predicted the appointment.

But, like his predecessors, Mr Putin, a former KGB Colonel, is also a bird of a subtler feather. Part of his political background is as one of the pragmatic pro-Western and pro-market group of politicians whom the West label as "reformers". Among his sponsors along the path to power was Anatoly Chubais, the high priest of the free market.

Both men's roots are in St Petersburg. Mr Putin first entered the political arena in the early Nineties as an aide to the city's mayor, Anatoly Sobchak.In the mid-Nineties, Mr Putin finally admitted serving with the USSR's foreign intelligence - then part of the KGB - for many years in East Germany. His boss was unfazed. "He is not a KGB man," said Mr Sobchak, "He is my pupil."

After the mayor was defeated in 1996, Mr Putin was invited by Mr Chubais to work in Moscow, acquiring jobs that now mark him out as a Kremlin insider: head of the Audit Department (where he monitored the presidential administration's spending); deputy to the manager of the Kremlin's massive property department; and deputy head of the administration. In 1998, he was appointed to lead the FSB and, a few months later, the Security Council, an influential advisory body that helps to co-ordinate the armed forces and security apparatus. He had become one of Russia's most powerful men.

President Yeltsin adores surprises, especially if they catch his opponents off guard. Yesterday, the latter were struggling to understand the point of sacking Mr Stepashin after only three months in office, at a time when there were signs of economic recovery. "It is hard to explain madness," said Boris Nemtsov, a former first deputy prime minister who was also once seen as Mr Yeltsin's anointed one. The president's Communist opponents were no less harsh. "One hundred per cent lunacy," said their leader, Gennady Zyuganov.

A shocked - and almost tearful - Mr Stepashin told his cabinet that the President had given him no reason. But there are plenty of possibilities. Last week one of the Kremlin's main opponents, Yuri Luzhkov, kicked off the election race by forming a powerful alliance with regional leaders. With parliamentary elections on 19 December, the Kremlin camp was looking dangerously flat-footed.

As Islamic gunmen romp on to Russian soil in Dagestan, it is highly likely that internal differences over what to do in the north Caucasus tinderbox will have also played a part. Mr Putin has a reputation as a tough Russian imperialist but in the end it has as much to do with Mr Yeltsin's personality.

He has been casting around for a successor for months, hawking the prime minister's job as the spring board for a presidential bid. And yet he is fiercely jealous.

Mr Primakov became too popular and too independent and was fired in May. The mistake of his successor, Mr Stepashin, was that he, too, was looking too good, too soon. Mr Putin will have to watch out.