The Kremlin chief of staff, tarred by his sympathies for the arrested head of Russia's giant oil company YUKOS, has resigned, Russian newspapers said today.
The daily Vedemostiquoted sources close to the Kremlin as saying President Vladimir Putin had accepted the offer of resignation by his chief of staff Mr Alexander Voloshin, one of the political establishment's most powerful backroom figures.
Mr Voloshin(47), is seen as tainted by his sympathies for Russia's richest man, Mr Mikhail Khodorkovsky, who was seized at gunpoint on a plane in Siberia on Saturday, brought to Moscow, charged with fraud and tax evasion and detained pending investigation.
The dramatic arrest was widely seen as a move by Mr Putin to blunt the businessman's political ambitions.
It also sends a message to Russia's other "oligarchs" - most of whom made their fortunes in the early post-Soviet days under Mr Putin's predecessor Mr Boris Yeltsin - not to meddle in political affairs in the upcoming election season when analysts expect to see the ruling elite easily keep its grip on power.
"The real balance of power in the Kremlin has shifted - to people in uniforms. For big business, this (Mr Voloshin's resignation) means one thing - pack your bags," Mr Dmitry Oreshkin, of the Merkator think-tank, said.
The saga has hit Russia's booming financial markets, sending them sharply down on Monday, though by yesterday they had largely recovered.
Both the United States and the EU believe the Khodorkovsky case might undermine the rule of law and so deter crucial foreign investment.
In the strongest official comment from overseas so far, EU External Relations Commissioner Mr Chris Patten urged the Kremlin to apply the rule of law if it wanted close EU trade links.