Bribes crisis mires Yeltsin's top reformers

Russia was last night immersed in a political crisis as Boris Yeltsin fired two top young reformers over a corruption scandal, while a question mark hung over the future of the driving force behind Russia's privatisation process - Anatoly Chubais.

The sackings are a blow to the West, as they represent the demise of a coterie of officials in the Kremlin who were seen as central to Russia's transition to a free market. The sell-off of state-run concerns seems certain to be set back. Last night Mr Yeltsin declined an offer to resign from Mr Chubais himself, but there will be huge political pressure for the first deputy prime minister's scalp, particularly from the vocal Communist and nationalist forces in parliament.

Whatever the outcome, Mr Chubais, 42, has suffered a major blow to his credibility and has lost top players in his team. The scandal is a profound embarrassment to Mr Yeltsin who only recently launched a highly publicised drive against the massive corruption in Russia, which has permeated every level of officialdom and business. The President - who has been enjoying an unusual period of political calm in the last few months - has conceded that upper levels of government are corrupt, and there have been several stage-managed firings and arrests. But evidence that this appears to include the team of Western-orientated economists at the heart of his government - rather than former Communist apparatchiki or mafiosi - is damaging indeed.

The scandal concerns revelations that five officials or former officials, including Mr Chubais, accepted $450,000 as an advance fee for an unpublished book called, appetisingly, A History of Russian Privatisation. The money came from a publishing company affiliated with a bank, Uneximbank, which recently benefited from two potentially highly lucrative sell-offs of state property, directly overseen by at least one of the book's alleged authors. As economics books are scarcely best-sellers, this hefty sum is being characterised as akin to a bribe.

A nervous-looking Mr Chubais appeared on television on Friday, where he admitted that the fee was "high", and that criticism of it was "fair". He has, however, denied wrongdoing, offering to pay most of the money to a newly created charity called the Fund for the Protection of Private Property.

Also on Friday, one of the hapless authors, Alexander Kazakov, a senior presidential aide, was sacked by Mr Yeltsin. Yesterday the heads rolled of two more - Maxim Boiko, a deputy prime minister, and Pyotr Mostovoi, head of the Russian Bankruptcy Commission. A fourth close associate of Mr Chubais, Alexander Kokh - another of the authors - has already been dismissed and is under criminal investigation over a separate murky book deal in which he banked $100,000.

Though deeply unpopular, Mr Chubais will be difficult for Mr Yeltsin to sack, partly because he was the ruthless mastermind of last year's successful election campaign. He is also a figure of huge importance in the eyes of Western investors and creditors, especially the International Monetary Fund. He is well known to all the major western leaders, including Tony Blair, whom he met recently during the Prime Minister's first trip to Moscow.