President Boris Yeltsin struck a defiant note yesterday by insisting he would not resign but would remain in office to help solve Russia's crippling currency and political crisis.
However, in a brief television interview, he spoke haltingly and acknowledged that he would not be running for president in 2000.
Returning to the Kremlin for the first time since the crisis erupted, Mr Yeltsin sought to quash rumours of his imminent political demise. "I am going nowhere," he said. "I'm not going to resign. I will work as provided for under the constitutional term to 2000."
Mr Yeltsin and his prime minister designate, Mr Viktor Chernomyrdin, attempted to convey the business-like air of leaders tackling Russia's problems, by telling the US administration that President Clinton's visit on Monday would go ahead as planned, and by entering negotiations with political leaders in the Duma to ensure Mr Chernomyrdin's smooth ratification. Police meanwhile were ordered to crack down on illegal currency traders.
Meanwhile, President Clinton yesterday urged Russia to "do the disciplined, hard things" it needed to do to revive its sinking economy and keep government policies on a reformist path.
But in a further indication that Mr Chernomyrdin and his associates will not do this, President Yeltsin fired Mr Anatoly Chubais, a committed reformer whom he appointed in June as Russia's special ambassador to international financial institutions.
The apparent drift back towards a command economy is beginning to alarm some observers. Last night, the US Deputy Treasury Secretary, Mr Lawrence Summers, warned that it would be a "serious error" for Russia to revert to a policy of central control of its economy.
World markets continued to feel the ripple effects of the crisis. The flight of investors from shares left most international stock markets sharply lower for the third successive day.
Losses were not as great as during Thursday's collapse, but dealers said the situation in Russia was now so bad that any recovery would be extremely fragile and that markets might have further to fall before there is any sustained recovery.
Last night US shares ended down 1.4 per cent, following Thursday's fall of more than 4 per cent. Earlier, Japanese shares fell 3.5 per cent to a 12-year low.
The Dublin market endured a panic-stricken period of trading yesterday morning, before buyers returned to the market tentatively to give some support to leading industrial and financial shares. However, the ISEQ index of Irish shares fell another 3 per cent, knocking £1.5 billion off the value of the market.
Despite President's Yeltsin's insistence that he would remain in office, there were indications last night that he was ceding substantial power to Mr Chernomyrdin.
Mr Alexander Kotenkov, Mr Yeltsin's personal representative in parliament, said the president was ready to grant the prime minister the power to name his own government and to give parliament more say in ministerial appointments.
However, the Duma rejected President Yeltsin's offer to refrain from dissolving parliament if it would undertake not to oust him. Mr Oleg Morozov, chief parliamentary negotiator, told Russian television the deal would have included a five-year moratorium on constitutional amendments in exchange for a two-year extension of the parliamentarians' terms.
Earlier, Mr Chernomyrdin put pressure on the Duma for a quick vote in his favour by enlisting support from three of the most powerful regional figures in Russia: Mr Yuri Luzhkov, the mayor of Moscow, Mr Yegor Stroyev, the head of parliament's upper house, and Mr Alexander Lebed, the governor of Krasnoyarsk. Russia's leading businessmen, the so-called oligarchs, are reported to be lobbying the government to put Boris Fyodorov, a prominent reformer, in charge of economic policy. They are also behind an invitation to Mr Domingo Cavallo, architect of Argentina's financial stabilisation, to come to Moscow as an adviser.
President Clinton in his first public remarks on the crisis, said that the US would "stick with" Russia if it did the hard things required to reform the economy.