Television channels have been gleefully beaming pictures of
the sting operation in which Moscow says the diplomat, wearing a
blond wig, was snared almost non-stop since his detention was
announced on Tuesday.

The strategy, reminiscent of Soviet times, is typical of
Putin’s tactics in the year since he returned to the presidency
as he tried to rally support among conservative voters following
protests by middle-class demonstrators that hit his ratings.

It is emblematic of a shift towards a more heavy-handed
policy against opponents since Putin’s long-serving “grey
cardinal”, Vladislav Surkov, was replaced in the Kremlin in late
2011 by the blunt and direct Vyacheslav Volodin.

Putin will have enjoyed embarrassing U.S. leaders over the
spy affair, but its timing and the high profile given to it by
state media show it is largely intended for a Russian audience.

“I was a little surprised at the media attention they gave
it. It sounded like right out of the 1970s,” U.S. House
Intelligence Committee Chairman Mike Rogers said during the
Reuters Cybersecurity Summit in Washington on Wednesday.

Suggesting some of the Russian publicity surrounding the
case was intended to put Americans in a negative light, he said:
“I think Putin longs for the Cold War. He’s a KGB guy.”

Critics say Putin, whose ratings recently sank to a 12-year
low before rebounding, is increasingly resorting to tactics
under Volodin that hark back to his Soviet and KGB past.

Volodin is even sometimes mentioned in the same breath as
Vyacheslav Molotov, one of late Soviet dictator Josef Stalin’s
foreign ministers. Like Molotov, he is often called “Iron Arse”
for spending long hours at his desk.

HALLMARK OF SHADOWY KREMLIN AIDE

This week’s alleged spying incident was one of the more
bizarre in the history of Russian-U.S. and Soviet-U.S.
relations, although other cases include the discovery in 2006 of
a fake rock with a transmitter inside being used by British
intelligence in Moscow.

Regardless of how deeply Volodin, 49, was involved in the
release of the FSB footage showing U.S. Third Secretary Ryan
Fogle being pinned down by an undercover Russian agent, the
handling of the saga bears his hallmark.

Brought into the Kremlin in response to the biggest
opposition protests of Putin’s now more than 13-year rule, he is
the man behind a campaign that portrays the former KGB spy as a
man of the people and a guarantor of stability.

Since Volodin’s appointment in December 2011, Russia has
whipped up anti-American and anti-Western rhetoric, Putin has
accused the United States of backing the protests and his
opponents say he has clamped down on dissent and civil society.

In that time, Putin has preached traditional conservative
values and boosted the influence of the Russian Orthodox Church
to try to solidify support among the blue-collar workers who
have traditionally been his power base.

No longer seeing a need for the more cunning and complex
strategies of a man like Surkov, Putin ousted him from his last
official position as a deputy prime minister last week, 16
months after his initial demotion from the Kremlin.

Volodin, by contrast, was at Putin’s side on Wednesday as
the president met parliamentary leaders in a government
residence in the Black Sea resort of Sochi.

As usual, Volodin said little as he took notes. Also as
usual, Putin denied tightening the screws on his opponents.

“What tightening of the screws? I don’t understand what this
is and we don’t need this,” he said.

LIMITING THE DAMAGE

Russian and U.S. officials have signalled that they do not
want a spy incident with echoes of the Cold War to upset efforts
to build trust or bring the warring sides in Syria together for
an international peace conference.

However, relations with the United States are in fact
secondary to Putin’s overriding goal of tightening his grip on
power sufficiently to serve out his term until 2018 and then
possibly seek a new six-year term.

Under Volodin, a veteran political strategist who cut his
teeth in the sometimes brutal election campaigns of the
freewheeling 1990s as Russia emerged from seven decades of
Soviet Communist rule, Putin has looked increasingly inwards.

“The video that the FSB filmed … is obviously aimed at the
general public,” Russian commentator Eldar Murtazin wrote in a
blog, likening the items which the FSB said it found on Fogle -
including three pairs of glasses, a compass, wads of money and
two wigs to “CIA gear” seen in Hollywood films.

Not everyone in Russia took it entirely seriously.

“The wigs and glasses made me laugh. Lipstick – where’s the
lipstick?” a blogger named Vladislav Klinkov wrote.

Herein lies a problem for Putin. While the Kremlin can
manipulate state television, the main source for news for a
large majority of Russians from the Baltic to the Pacific, it
does not control the Internet and social media sites.

Not only have the Internet and such sites been used to
spread word of anti-Putin protests by liberals and middle-class
voters fearing political and economic stagnation under him,
Volodin’s ability to get to grips with new media is not clear.

(Additional reporting by Alistair Bell in Washington, Darya
Korsunskaya in Sochi, Russia, and Steve Gutterman in Moscow;
editing by Mark Heinrich)

Moscow expelled a U.S. diplomat on Tuesday, saying he had been caught red-handed with disguises, special equipment and wads of cash as he tried to recruit a Russian agent for the CIA.

U.S. Ambassador Michael McFaul spent about 30 minutes at the Russian Foreign Ministry on Wednesday after being summoned to give an explanation, and the Ministry said it had issued a formal protest.

Although President Vladimir Putin said nothing about the incident, state news channels repeatedly showed footage of the U.S. diplomat, Ryan Fogle, in an incongruous-looking blond wig being pinned to the ground by a Russian undercover agent in a “sting” operation.

The images, highly embarrassing for the United States, appeared part of efforts to boost Putin’s ratings following his allegations that Washington has stoked protests against him, rather than an attempt to derail relations between the nations.

“It (the attempted recruitment) does not contribute to the future process of strengthening mutual trust between Russia and the United States and putting our relations on a new level,” Putin’s spokesman, Dmitry Peskov, told Itar-Tass news agency.

But he avoided inflammatory language over the expulsion of Fogle, a third secretary at the U.S. Embassy who was detained late on Monday.

There is little sign that either country wants to go beyond a minimum response as Washington and Moscow try to improve strained relations and bring the warring sides in Syria together for an international peace conference.

In Washington, U.S. State Department spokesman Patrick Ventrell suggested the episode was unlikely to affect broader U.S.-Russian relations or plans for the Syria conference.

“I’m not sure I would read too much into one incident one way or another,” Ventrell said.

RALLY SUPPORT

The incident may have been directed more at a domestic Russian audience to rally support among conservative and traditional voters following protests against Putin by mainly liberal and middle-class voters.

The former KGB spy has also used more blunt tactics against the opposition since the departure of long-term political adviser Vladislav Surkov at the end of 2011 and his replacement by Vyacheslav Volodin, a less sophisticated strategist.

“In the Russian elite there are influential groups who oppose America and waste no opportunity to spite the United States,” political analyst Pavel Salin said.

State media moved into action quickly after the federal Security Service, a successor to the KGB, announced Fogle’s detention.

Television channels soon started showing footage of Fogle’s detention and photographs appeared on the web showing the diplomat in the blond wig, with props reminiscent of a schoolboy’s spy kit.

A photograph published by the Russia Today channel on its website showed two wigs, apparently found on him, as well as three pairs of glasses, a torch, a mobile phone and a compass.

Also displayed was a wad of 500-euro ($650) notes and a letter printed in Russian and addressed to a “Dear friend” offering $100,000 if the target cooperated – with the promise of more to come for long-term cooperation.

U.S.-Russian relations had thawed markedly under Obama’s first-term “reset” of ties, although they have chilled again since Putin returned to the presidency a year ago.

Russia has ejected the U.S. Agency for International Development and curbed U.S.-supported NGOs in moves it says are aimed at preventing foreign meddling.

Moscow has also responded to U.S. legislation imposing visa bans and asset freezes on Russians accused of human rights abuses with a similar law against Americans, and has banned Americans from adopting Russian children.

But President Barack Obama and Putin have signaled they want to patch things up again, including by improving counterterrorism cooperation after the Boston Marathon bombings.

(Additional reporting by Alissa de Carbonnel and Thomas Grove; Editing by Elizabeth Piper and Pravin Char)

Ministers squirmed in their seats on each side of the table
as Putin humiliated them one-by-one in images shown repeatedly
by state television. One dared to answer back. The next day he
was out of a job.

The tactic of showing television footage of Putin ruthlessly
in command is typical of his long rule, intended to burnish his
image as the ultimate arbiter. But Wednesday’s dismissal of
Deputy Prime Minister Vladislav Surkov, once a trusted aide, has
underlined how isolated Putin is a year into his third term.

Surkov was, until December 2011, a member of Putin’s inner
circle, the architect of the political system that concentrated
power in the president’s hands.

He was demoted from the Kremlin to the government when
anti-Putin protests challenged the very foundations of the
structure he had created. He had become more distant from Putin,
often speaking out of turn.

Since Surkov’s departure from the presidential staff,
veterans of the spy and security agencies and other
conservatives known as the “siloviki”, or men of power, have
gained the upper hand in shaping Putin’s thinking and are behind
what the opposition sees as a Soviet-style clampdown on dissent.

Putin has in the past two years been abandoned by, forced
out or become distant from the more liberal thinkers who once
influenced him, leaving him politically isolated as his
popularity wanes and the economy slides towards recession.

“I won’t say that power is slipping from his hands but he is
not as strong as he was,” said a source once close to the
Kremlin and the government. “At the start of the 2000s, he was a
unifying figure. He is no longer that.”

SHIFT IN KREMLIN TACTICS

Surkov’s initial fall from grace as the top Kremlin
strategist was a result of the emergence of a protest movement,
born out of anger over alleged electoral fraud, which Putin
initially appeared poorly prepared for.

His replacement by a less sophisticated operator, Vyacheslav
Volodin, heralded a shift in policy towards anti-Western
rhetoric and tougher tactics against the protesters.

It is a trend that has continued as Putin sought to tighten
his grip on power by rebalancing the forces around him after a
drop in support, although the drop was not dramatic enough to
prevent him winning a presidential election in March last year.

The choice of Dmitry Medvedev to replace Putin as president
in 2008, when constitutional term limits forced the former KGB
spy to step aside temporarily, had appeared to secure a role for
the relatively liberal reformers.

But the man Medvedev saw off in 2008, ex-KGB former defence
minister Sergei Ivanov, is now in the ascendancy as head of
Putin’s Kremlin administration.

Alexander Bastrykin, the head the government’s powerful
Investigative Committee, which is sometimes likened to the FBI
is another influential figure.

Igor Sechin, another ex-KGB conservative aide who has long
been at Putin’s side, also has Putin’s ear as head of state oil
major Rosneft, which has grown under his tutelage into
the world’s largest publicly listed energy company by output.

More liberal reformers, such as Putin’s finance minister
until September 2011, have been sidelined. Although Kudrin, a
darling of the West, is widely believed to still have an
informal line to the Kremlin, he has proved reluctant to rejoin
a team he portrays as taking Russia in the wrong direction.

Other economic liberals who featured prominently in Putin’s
first spell as president, from 2000 until 2008, but are now gone
include economic aide Andrei Illarionov and Mikhail Kasyanov,
his first prime minister who is now in the opposition.

German Gref, the architect of liberal market reforms during
Putin’s first term, no longer has a direct control over policy
although his position as head of state-controlled Sberbank
means he has not entirely left the fold.

Medvedev himself has watched meekly as the more liberal of
his reforms as president have been reversed by Putin and his own
position is in danger as prime minister.

The more hawkish forces in the Kremlin have been repeatedly
undermined him and his team, and Putin could make his long-term
ally the ultimate scapegoat if the economic slowdown that has
taken growth from 5 percent in early 2012 to just 1 percent in
the first quarter of this year continues.

TOUGH TACTICS

The clearest sign of the shift towards the more conservative
forces has been the increasingly tough approach towards the
protest movement, mainly led by middle-class residents of
Rusisa’s biggest cities.

In the 12 months since Putin has been back in the Kremlin,
parliament has passed a series of laws which his opponents say
are repressive and meant to silence them. Several opposition
leaders, including anti-corruption blogger Alexei Navalny, face
the threat of jail over what they say are trumped-up charges.

The protests have dwindled but at a price to Putin’s image.

“I remember the times of (Soviet dictator Josef) Stalin very
well. I should say our current leaders are returning to those
times by putting pressure on any sign of civil activity,” said
Lyudmila Alexeyeva, a veteran human rights campaigner.

Putin denies taking Russia back towards Stalinism but said
in his annual television question-and-answer session last month
that the country needed order and discipline – words often used
by Stalin’s admirers in Russia.

Like this week’s choreographed dressing down of the
government, the televised phone-in, which this year lasted a
record 4 hours and 47 minutes, looked outdated, critics said.

Although Putin has often used the format to show his command
of facts and figures and his readiness to address Russians’
everyday problems, there are signs that it is no longer enough
to keep people happy.

To regain popularity, Putin has shifted towards patriotism,
to appeal to the blue-collar workers in the provinces who are
his traditional support base, and to populist economic measures.

Now 60, he issued a series of decrees on taking office as
president a year ago which promised more kindergartens, housing
and other potentially costly measures to the budget.

But they have not been carried out by the cash-strapped
government – it was Surkov’s role to oversee their
implementation – and dissatisfaction is starting to grow,
pollsters say.

Putin has talked often about the need to reduce Russia’s
heavy reliance on exports of energy and other natural resources,
leaving it vulnerable to a drop in the price of oil, but has
avoided doing so because of the risk to his popularity,
potentially hitting voters in the pocket.

“There are great reserves of patience in Russia,” Lev
Gudkov, head of the Levada Center, an independent polling group
that says Putin’s ratings are now much lower than at their peak
before the 2008-09 financial crash, said this week.

In a recent Levada poll, 41 percent did not want Putin to
run again for president in 2018, against 28 percent who did.

“People are dissatisfied … you can campaign, try to
convince and make promises, but they feel the decline in living
standards,” Gudkov said. “Regardless of the propaganda, and the
populist statements, Putin’s social (support) base is falling.”

OLIGARCHS UNSETTLED

Putin’s first presidential term from 2000 until 2004 was
marked by the consolidation of power by reining in rebellious
regions such as Chechnya and clipping the wings of super-rich
businessmen who had amassed power as well as money.

His second term until 2008 saw an oil-fuelled economic boom
and a tightening of his political control, including the
dismembering of the huge Yukos oil firm and its transfer into
mostly state hands after the jailing of its owner, Mikhail
Khodorkovsky, who had clashed with Putin.

Putin’s spell as prime minister until last year was largely
spent dealing with the recovery from the 2008-09 economic crisis
and continuing to pull the strings as prime minister, to smooth
the way for his return to the Kremlin.

The fourth stage of his domination of Russia has, critics
say, been marked by political and economic stagnation.

Putin has sought to win over voters by promising to get
tough on corruption and taking steps to force government
officials and members of parliament to keep their money in
Russia rather than abroad.

He sacked Defence Minister Pavel Serdyukov, a long-term
ally, last November after an investigation into the illegal sale
of ministry property.

Polls regularly show corruption is the problem which
Russians most want Putin to resolve, but also indicate they have
little confidence that he will be able or willing to do so. Some
see him as one of the creators and beneficiaries of the
political system, as part of the problem.

His efforts to ensure Russians keep their money in Russia
has also started to unsettle the wealthy businessmen on whom he
depends. The risk of tightening legislation to limit the
transfer of money abroad is that he discourages businessmen from
keeping it in the country in the first place.

Capital flight has continued and some tycoons, such as
telecoms-to-banking oligarch Mikhail Fridman, are threatening to
diversify abroad, basing their companies outside Russia and
taking their money with them.

Many Russia analysts regard the threat posed to Putin by the
potential loss of support from the wealthy tycoons known as
oligarchs as much bigger than the dangers he faces from the
political opposition, which is easier for him to control.

Most observers expect Putin to serve out his presidency but
also say his ability to secure another six-year term in 2018
will recede unless he starts pulling Russia out of stagnation.

The two major powers’ joint announcement that they would try to bring together representatives of President Bashar al-Assad’s government and the rebel forces fighting to oust him represents their first serious diplomatic initiative in nearly a year.

After lengthy talks in Moscow on Tuesday, the United States and Russia said they would try to breathe life into a carefully negotiated agreement they both endorsed in June 2012 that left open the question of whether or not Assad must leave power.

Their idea is to prod both sides to the negotiating table – possibly in Geneva by the end of May – to try to end the war and to get them to form a transitional government by mutual consent.

That framework to end the conflict, in which more than 70,000 people have been killed since it began in 2011, was laid out in the so-called June 30, 2012 Geneva Communiqué.

After showing little interest in getting it implemented, Moscow’s apparent willingness to revive the idea may reflect concern that U.S. President Barack Obama is rethinking his opposition to some kind of military intervention in Syria.

Signs of this include the White House’s acknowledgement on April 25 that U.S. intelligence agencies believe the Syrian government probably used chemical weapons against its people, something Obama had previously described as a “red line”.

There are also indications the conflict is widening – Israel bombed targets in Syria twice at the weekend – and concerns about the prominence of Islamist militants, some loyal to al Qaeda, among the armed opposition, as well as about the role of Iran and its Lebanese Hezbollah ally in supporting Assad.

FEAR OF INTERVENTION

Finally, there are louder American voices urging Obama to arm the rebels, among them Senator Robert Menendez, the chairman of the influential Senate Foreign Relations Committee who introduced legislation to that effect on May 6.

“Of all those arguments, I think the greatest Russian fear is that the U.S. and the West are headed for some form of military involvement in Syria, one way or another, and that is likely to have been operative in their minds,” said one Western diplomat who spoke on condition of anonymity.

A Russian Foreign Ministry statement alluded to that fear on Monday. Expressing alarm at the Israeli air strikes, it said Russia was “seriously concerned by the signs of preparation of global public opinion for possible armed intervention” in Syria.

Obama has made no secret of his desire to avoid military entanglement in Syria as he has brought U.S. troops home from Iraq and is trying to wind up the U.S. war in Afghanistan.

Diplomats said if this were to change, arming selected rebel groups is a likelier first step than direct intervention such as a bombing campaign to take out Syrian air defenses and impose no-fly zones, let alone sending in U.S. troops.

Russian Foreign Minister Sergei Lavrov said after talks with Kerry on Tuesday that Moscow was not fixated on Assad’s future.

“We do not care about the fate of particular people. We care about the fate of the Syrian people. And the fate of the Syrian people, the fate of Syria, the fate of specific people must be decided by the Syrians themselves,” he said.

Diplomats voiced some skepticism about whether Russia was truly prepared to cut Assad loose – its position on this has shifted little in practice over the past two years.

“The way they committed to it publicly is new but on substance, it’s not really clear to me … how much they are going to push Assad to give a chance to these negotiations,” said another diplomat, noting that “this whole dance on should Assad leave, when should he leave” remained unresolved.

Russia has insisted Assad’s exit cannot be a precondition for talks, a point Washington appears to have conceded.

The United States has said Assad must go but it has not explicitly made this a condition for holding talks, and it may be open to some kind of formula where Assad might step down later, assuming he is willing to leave power at all.

DIPLOMATIC AMBIGUITY

The Geneva Communiqué did not demand Assad’s removal and it was vague on who might form a transitional government, saying: “It could include members of the present government and the opposition and other groups and shall be formed on the basis of mutual consent.”

The United States has long argued that the phrase “mutual consent” meant the opposition could veto any role for Assad.

Diplomats said that while Russia might be able to get the government to the negotiating table, it would be hard for the United States and its Western and Arab allies to persuade the opposition to swallow the bitter pill of going to talks with the possibility that Assad might stay in power for some time.

Washington, however, could tell the opposition further U.S. support was conditional on their participation in the talks.

But the Western-backed, Cairo-based opposition National Coalition, which welcomed the U.S.-Russian initiative, while saying hopes for democracy rested on Assad’s exit, has almost no control over rebel forces on the ground.

Jon Alterman, director of the Middle East program at the Center for Strategic and International Studies in Washington, said it was worth exploring how hard the Russians might be willing to lean on Assad.

“There had been a sense the Russians were totally immovable on Syria and it’s good to question that, both in the wake of increasing concerns about chemical weapons use and in the wake of concern that extremists are gaining a greater foothold,” he said.

MUTUAL CONCERNS

Alterman said the United States and Russia have some shared interests in Syria, among them concern that “extremist activity” in Syria could spread through the Middle East and Central Asia.

“A significant part of the (Syrian) population is afraid that … the regime will be overthrown,” Lavrov said on Tuesday.

“It is not because they like this regime. It is not because they like the ongoing, horrific events in Syria … but because they are afraid that if those who fight the regime win, then Syria, from a multi-ethnic, multi-confessional state … will turn into a country where extremists rule the day,” he said.

“And (while) it is not spoken out publicly today, this opinion is shared by all my interlocutors. This is why … we have tried (to) put forward an initiative to unite all groups represented both by the regime and by the opposition.”

Doubts remain over whether Moscow has significantly shifted policy or is buying time by showing it is trying to cooperate with the Western powers over Syria, at a time when Washington also wants to show its own public it is seeking a breakthrough.

In one sign that Russia may by no means have jettisoned its support for Assad, the Wall Street Journal reported on Thursday that Israel has told the United States that a Russian deal to sell Syria advanced ground-to-air missile systems to Syria was imminent. Moscow did not immediately comment on the report.

Alterman also noted Russia’s deep reluctance, following the Western intervention that helped Libyan rebels topple Muammar Gaddafi, to see the West help overthrow another Arab leader.

“Russian concern with reinforcing the precedent of outside intervention and with the United States displacing Russian allies with American ones has driven Russia to opposing international cooperation on replacing the government of Assad.”

Alterman said reaching a peace settlement in Syria “will be extraordinarily difficult but not impossible and it’s probably a better outcome for the Russians than completely losing control”.

(Additional reporting by Thomas Grove, Steve Gutterman and Alexei Anishchuk in Moscow; editing by Alistair Lyon)

The Kremlin said President Putin had accepted the
resignation of the man who for a decade wielded immense power as
the grey cardinal behind the scenes under the former KGB spy but
later moved over to Prime Minister Dmitry Medvedev’s camp.

His departure is a blow for Medvedev, who is under growing
pressure a year after swapping jobs with Putin for failing to
halt Russia’s slide towards recession.

“It’s of his own volition,” presidential spokesman Dmitry
Peskov said, dismissing suggestions Surkov, 48, had been pushed.
“It’s to do with the fact that decrees were not carried out.”

But such decisions are almost always choreographed by Putin
who, sitting at the head of a table with cabinet ministers on
either side, glared straight at Surkov as he scolded them at a
meeting on Tuesday for not carrying out his orders and decrees.

Russian media and political analysts have long said a rift
has opened up between Putin and Medvedev, his long-time ally and
a former president, although both deny it.

“Of course it’s a strike against Medvedev,” said Dmitry
Oreshkin, an opposition-minded political analyst.

“It turns out he was simply devoured. It will take some time
and the prime minister will also be devoured.”

Surkov is best known inside Russia for shaping the Kremlin’s
mindset under Putin – confident, ruthlessly commercial,
anti-Western and authoritarian despite his pet phrase,
“sovereign democracy,” under which Putin and his United Russia
party dominate the political scene.

As Putin’s top political adviser, Surkov became known as the
Kremlin’s puppet master, Russia’s answer to France’s Cardinal
Richelieu, and was loathed by opponents whom he often targeted
with his acerbic wit.

One author wrote that he was “absolutely unnoticeable as a
living person” in the role of grey cardinal. But he came to be
seen as Russia’s third-most-powerful political figure, after
Putin and Medvedev, and kept a portrait of Argentine-born
revolutionary Che Guevara in his Kremlin office.

He quit the Kremlin in December 2011 after street protests
threatened Putin’s grip on power and attacked the very system he
helped create, undermining what had appeared his peerless
mastery of the political scene. He had also made a mistake by
calling the protesters “the best part of society” in Russia.

BOHEMIAN SIDE

In government, Surkov had been responsible for overseeing
implementation of presidential decrees and innovation projects.

He may yet be back because Putin often rotates the people he
trusts, moving them from one role to another. Surkov spoke out
in London at the weekend in favour of creating alternative
parties to United Russia, fuelling speculation he might return
eventually in a role overseeing a new pro-Kremlin party.

His comments in London may have been part of his downfall
because he criticised federal investigators looking into
suspected embezzlement at Skolkovo, a state-owned innovation hub
created by Medvedev.

A spokesman for the federal Investigative Committee, which
has been instrumental in pursuing criminal cases against Kremlin
critics and is headed by Putin ally Alexander Bastrykin, hit
back in a newspaper article criticising Surkov.

Half-Chechen, Surkov also has a bohemian side. He has
written songs for a Russian rock group, Agata Kristi, and is
widely believed to be author of a novel called “Almost Zero”
which was published under a pseudonym.

He had become increasingly distant from Putin since the
start of the protests over Putin’s decision to return to the
presidency after four years as prime minister, a post he held
while Medvedev kept the president’s seat warm for him.

“The differences between them began long ago,” a political
source close to the Kremlin said of Putin’s relationship with
Surkov. Making clear who was behind Surkov’s departure, he said:
“Only one person could have decided this – Putin.”

Surkov’s exit left Medvedev’s government looking like “a
table with only three legs” that could be toppled at any time,
political analyst Alexei Mukhin told Ekho Moskvy radio, though
there are no outward signs Putin is about to dismiss Medvedev.

Surkov shares a degree of cynicism with many of his
generation of Russians who were educated as the children of a
superpower only to see the Soviet empire collapse around them.

(Additional reporting by Darya Korsunskaya, Maria Tsvetkova,
Polina Devitt and Steve Gutterman, writing by Timothy Heritage,
editing by Elizabeth Piper and Jon Boyle)

The Kremlin said President Putin had accepted the resignation of the man who for a decade wielded immense power as the grey cardinal behind the scenes under the former KGB spy but later moved over to Prime Minister Dmitry Medvedev’s camp.

The departure of one of his most experienced lieutenants is a shot across the bows for Medvedev, who is under growing pressure a year after swapping jobs with Putin for failing to halt Russia’s slide towards recession.

“It’s of his own volition,” presidential spokesman Dmitry Peskov said, dismissing suggestions Surkov, 48, had been pushed. “It’s to do with the fact that decrees were not carried out.”

But such decisions are almost always choreographed by Putin who, sitting at the head of a table with cabinet ministers on either side, glared straight at Surkov as he scolded them at a meeting on Tuesday for not carrying out his orders and decrees.

Russian media and political analysts have long said a rift has opened up between Putin and Medvedev, his long-time ally and a former president, although both deny it.

“Of course it’s a strike against Medvedev,” said Dmitry Oreshkin, an opposition-minded political analyst.

“It is a direct intervention by the president into the nomenklatura of the government. It turns out he was simply devoured. It will take some time and the prime minister will also be devoured.”

Surkov is best known inside Russia for shaping the Kremlin’s mindset under Putin: confident, ruthlessly commercial, anti-Western and authoritarian despite his pet phrase, “sovereign democracy,” under which Putin and his United Russia party dominate the political scene.

As Putin’s top political adviser, Surkov became known as the Kremlin’s puppet master, or Russia’s answer to France’s Cardinal Richelieu or a modern-day Machiavelli, and was loathed by opponents, whom he often targeted with his acerbic wit.

One author wrote that he was “absolutely unnoticeable as a living person” in the role of grey cardinal or puppet master. But he came to be seen as Russia’s third-most-powerful political figure, after Putin and Medvedev, and kept a portrait of Argentine-born revolutionary Che Guevara in his Kremlin office.

He quit the Kremlin in December 2011 after street protests threatened Putin’s grip on power and attacked the very system he helped create, undermining what had appeared his peerless mastery of the political scene. He had also made a mistake by calling the protesters “the best part of society” in Russia.

BOHEMIAN SIDE

In government, Surkov had been responsible for overseeing implementation of presidential decrees and innovation projects.

He may yet be back because Putin often rotates the people he trusts, moving them from one role to another. Surkov spoke out in London at the weekend in favour of creating alternative parties to United Russia, fuelling speculation he might return eventually in a role overseeing a new pro-Kremlin party.

His comments in London may have been part of his downfall because he criticised federal investigators looking into suspected embezzlement at Skolkovo, a state-owned innovation hub created by Medvedev.

A spokesman for the federal Investigative Committee, which has been instrumental in pursuing criminal cases against Kremlin critics and is headed by Putin ally Alexander Bastrykin, hit back in a newspaper article criticising Surkov.

Half-Chechen, Surkov also has a bohemian side. He has written songs for a Russian rock group, Agata Kristi, and is widely believed to be author of a novel called “Almost Zero” which was published under a pseudonym.

He had become increasingly distant from Putin since the start of the protests over Putin’s decision to return to the presidency after four years as prime minister, a post he held while Medvedev kept the president’s seat warm for him.

“The differences between them began long ago,” a political source close to the Kremlin said of Putin’s relationship with Surkov. Making clear who was behind Surkov’s departure, he said: “Only one person could have decided this – Putin.”

Surkov’s exit left Medvedev’s government looking like “a table with only three legs” that could be toppled at any time, political analyst Alexei Mukhin told Ekho Moskvy radio, though there are no outward signs Putin is about to dismiss Medvedev.

Surkov shares a degree of cynicism with many of his generation of Russians who were educated as the children of a superpower only to see the Soviet empire collapse around them.

He served in the army before entering business as the Soviet Union crumbled. Among his patrons were Alfa Group, owned by rich businessman Mikhail Fridman, and oil tycoon Mikhail Khodorkovsky, who was jailed after falling foul of the Kremlin.

Surkov first joined the Kremlin under then-president Boris Yeltsin and also worked there under Medvedev.

(Additional reporting by Darya Korsunskaya, Maria Tsvetkova, Polina Devitt and Steve Gutterman, writing by Timothy Heritage, editing by Elizabeth Piper and Jon Boyle)

The Kremlin said in a statement that President Vladimir
Putin had accepted Surkov’s resignation, one day after the
former KGB spy reprimanded the government for failing to carry
out many of his orders and decrees.

“It’s of his own volition,” presidential spokesman Dmitry
Peskov said. “It’s to do with the fact that decrees were not
carried out.”

But Russian media and political analysts have long suggested
a rift has opened up between Putin and Medvedev, his long-time
ally and a former president, as Russia slides towards recession.

Sitting at the head of a long table with cabinet ministers
on either side, their heads bowed, Putin scolded the government
repeatedly at Tuesday’s meeting – the latest signal he is losing
patience with Medvedev over Russia’s growing economic problems.

“Of course it’s a strike against Medvedev,” said Dmitry
Oreshkin, an opposition-minded political analyst.

“It is a direct intervention by the president into the
nomenklatura of the government. It turns out he was simply
devoured. It will take some time and the prime minister will
also be devoured.”

Surkov, 48, was once Putin’s top political adviser but he
quit the Kremlin in December 2011 as Putin faced the biggest
protests of his 13 years in power.

He had until now been responsible for overseeing government
implementation of presidential decrees and innovation projects.
His role will be taken by Arkady Dvorkovoich, a deputy prime
minister and Putin’s former chief economic adviser.

Once ranked as Russia’s third-most-powerful political
figure, after Putin and Medvedev, Surkov was long seen as the
grey cardinal who manipulated events behind the scenes for Putin
and helped him concentrate power in his own hands.

Half-Chechen, he also has a bohemian side. He has written
songs for a Russian rock group, Agata Kristi, and is widely
believed to be author of a novel called “Almost Zero” which was
published under a pseudonym.

He had become increasingly distant from Putin since the
protests began over the former KGB spy’s plans to return to the
presidency after four years as prime minister, a post Putin
held while Medvedev kept the president’s seat warm for him.

“The differences between them began long ago,” a political
source close to the Kremlin said of Putin’s relationship with
Surkov.

Surkov left the Kremlin when his mastery of the political
scene was undermined at the start of the anti-Putin protests
because the system he had helped create under Putin was now
being questioned by the protesters.

He suddenly looked out of date as the Kremlin struggled
initially to come up with ways to deal with the protests and
Putin’s early tactic of ignoring and, at times, mocking the
protesters backfired on him by antogonising his opponents.

Surkov also traded barbs this week with the head of Russia’s
investigative committee, a Russian equivalent of the FBI, over
an investigation into corruption at Skolkovo, a state-owned
innovation hub created by Medvedev.

The committee is looking into embezzlement at the centre,
which Medvedev created to try to diversify the oil-dependent
economy.

(Writing by Timothy Heritage, editing by Elizabeth Piper and
Jon Boyle)

Lebedev, wearing a dark suit and white sneakers with black
laces, spent only a few minutes in court before the trial was
adjourned until May 20 after Sergei Polonsky, the man he is
accused of punching, failed to show up.

The financial backer of Britain’s Independent and London
Evening Standard newspapers acknowledged he was involved in a
brawl while recording a television chat show in 2011 and denies
charges of hooliganism and political hatred.

If convicted, he could face up to five years in jail.

He says the case is President Vladimir Putin’s revenge for
his criticism of the government and a warning to other rich
Russian businessmen known as oligarchs.

“It’s the government that’s against me,” Lebedev told
reporters outside the Moscow courtroom.

The powerfully built multi-millionaire jumped out of his
chair and hurled punches at property developer Polonsky after he
goaded Lebedev as they recorded a television talk show. Polonsky
was knocked backwards and off the studio podium.

Lebedev, who co-owns Russia’s main campaigning newspaper
with former Soviet leader Mikhail Gorbachev, says he acted in
self-defence.

“If you were attacked by a bully, sworn at obscenely and
threatened with being hit in the face, would you be upset about
it?” he asked reporters.

Denying the charges against him, he said, “Even if I
overestimated the threat, I definitely did not cause anyone any
damage, did not commit any act of hooliganism and did not show
any political hatred.”

Adjourning the hearing, Judge Andrei Bakhvalov said a ban on
Lebedev travelling outside the country would be temporarily
lifted because he has to attend another unspecified court case.

PUTIN DENIES MANIPULATING COURTS

Lebedev, 53, is rare among oligarchs in speaking out against
the Kremlin since the imprisonment of oil tycoon Mikhail
Khodorkovsky, who was arrested in 2003 after he fell out with
Putin. His Yukos oil company was broken up and sold off.

Lebedev says his own case is part of a broader clampdown on
Putin’s opponents, and accuses criminal investigators of acting
on the Kremlin’s orders to punish him for campaigning against
corruption and showing sympathy with the opposition.

Lawyers for Polonsky, a one-time billionaire, have described
Lebedev as a fantasist. But Polonsky could also go to jail – he
was detained in Cambodia in January, accused of assault and
illegal detention after an incident on a boat there.

Putin referred to Lebedev’s behaviour as “hooliganism” soon
after the punch-up, playing on many Russians’ resentment of the
oligarchs who made vast fortunes as most others struggled during
and after the Soviet Union’s collapse in 1991.

Putin, who began a third term a year ago after the biggest
protests since he first rose to power in 2000, has denied using
the courts for political ends even though several opponents face
criminal charges which they also say are politically motivated.

Lebedev, a former KGB spy, made billions trading stocks and
bonds but his 2012 net worth was estimated at $1.1 billion by
Forbes and he is no longer on the magazine’s billionaires list.

His business interests in Russia include a bank, National
Reserve Corporation, real estate assets and a potato farm.

(Additional reporting by Megan Davies; Editing by Louise
Ireland)

The financial backer of Britain’s Independent and London
Evening Standard newspapers faces up to five years in jail if he
is convicted on charges of hooliganism and political hatred over
a televised punch-up in 2011.

The powerfully built multi-millionaire jumped out of his
chair and hurled punches at property developer Sergei Polonsky
who had goaded Lebedev during the recording of a television talk
show. Polonsky was knocked backwards and off the studio podium.

Lebedev, who co-owns Russia’s main campaigning newspaper
with former Soviet leader Mikhail Gorbachev, says he acted in
self-defence. But, he says, the scuffle is being used as a
pretext to silence him and he expects to go to jail.

“I have to be ready for that or why did they come after me
with hooliganism charges?” Lebedev said in a recent telephone
interview as he prepared for the trial in a Moscow court.

He is rare among the rich businessmen known as oligarchs in
speaking out against the Kremlin since the imprisonment of oil
tycoon Mikhail Khodorkovsky, who was arrested in 2003 after he
fell out with Putin and remains jailed.

Lebedev says the case is part of a broader clampdown on
Putin’s opponents, and accuses criminal investigators of acting
on the Kremlin’s orders to punish him for campaigning against
corruption and showing sympathy with the opposition.

“I know the position of the president,” Lebedev said in
another interview with Reuters. “He thinks it is true that I
have been funding (the opposition), so I was violating rule No.
1 – if you have money you should not interfere (in politics).”

Lawyers for Polonsky, a one-time billionaire, have described
Lebedev as a fantasist. But Polonsky could also go to jail – he
was detained in Cambodia in January, accused of assault and
illegal detention after an incident on a boat there.

PUTIN SAYS NO CRACKDOWN

Putin referred to Lebedev’s behaviour as “hooliganism” soon
after the punch-up, playing on many Russians’ resentment of the
oligarchs who made vast fortunes as most others struggled during
and after the Soviet Union’s collapse in 1991.

Such resentment means few Russians are likely to have
sympathy with Lebedev.

Putin, who returned to the Kremlin a year ago after the
biggest protests of his 13-year rule, has also denied using the
courts for political ends even though several opponents face
criminal charges which they say are politically motivated.

“Those who fight against corruption must be crystal clean
themselves, otherwise they just engage in political
self-promotion,” Putin said in comments shown nationwide last
month.

Lebedev is a former KGB agent who made billions trading
stocks and bonds after the Soviet Union fell apart in 1991 but
he fell off Forbes magazine’s list of billionaires this year. It
had put his net worth at $1.1 billion in 2012.

His business interests in Russia include a bank, National
Reserve Corporation, real estate assets and a potato farm. He
has said he is looking to sell his Russian assets because of
pressure from the Kremlin but made clear he was having trouble
doing so because he had fallen out of favour.

He and the newspaper he co-owns, Novaya Gazeta, have spoken
out against state corruption and criticised the Kremlin,
ignoring the fate suffered by Khodorkovsky, who was jailed on
charges of fraud and tax evasion. Khodorkovsky’s Yukos oil
company was broken up and sold off, mainly into state hands.

Since then, other oligarchs have chosen to toe the Kremlin
line or flee the country. Big legal cases involving the
oligarchs have mostly been fought in foreign courts.

(Additional reporting by Megan Davies; Editing by Jon Hemming)

The banner, declaring “Freedom for the May 6 prisoners!”, rippled over three floors at the top of a high-rise apartment block on Novy Arbat, one of Moscow’s busiest streets. It was quickly taken down and one man was arrested.

The gesture of defiance was a muted prelude to a planned evening rally on the Moscow square where, a year ago, baton-wielding riot police broke up a protest against Putin on the eve of his inauguration. Hundreds were detained.

Opposition activists also plastered the names of protesters awaiting trial for last year’s rally across street signs in the city of Yekaterinburg, in a twist on the tradition of honoring heroes by naming streets after them.

Putin’s critics saw the use of force and the threat of jail sentences as a shift towards intimidation and repression and a turning point in the Kremlin’s tactics against the opposition.

“The GULAG again in Russia?” said Gennady Gudkov, a former member of parliament, drawing comparisons between Putin and the methods used by Soviet dictator Josef Stalin, who sent millions to their death in labor camps.

Summoning people to the protest planned on Bolotnaya Square, he said in online comments: “If you don’t want such a future, come today to Bolotnaya!”

The opposition hope to win back the tens of thousands who protested against Putin early last year. But, disjointed and chaotic, the opposition has lost many of its mainly young, urban and middle-class supporters. Anger has given way to apathy.

OPPOSITION BATTLES APATHY

The liberal Moscow radio station Ekho Moskvy even held a phone-in asking whether there was any point holding the protest.

An initial rally in Moscow on Sunday attracted only several hundred people and appeared to underline divisions in the opposition, as most of its leaders stayed away.

Putin, who in 13 years of power has succeeded in sidelining his opponents, has mocked the opposition.

He took aim at protest leader Alexei Navalny last month, reveling in his opponent’s struggle against criminal charges for theft in a provincial court. Navalny says the charges, which carry a 10-year jail term, are politically motivated.

“Those who fight corruption must be crystal clean themselves,” Putin said in his annual question-and-answer session with Russians.

As if to underline the opposition’s impotence, the Justice Ministry said in an online statement that it had refused to register a political party to support Navalny, one of the protest organizers. It did not say why.

Parliament has also pushed through several laws seen by the opposition as intended to muzzle critics – including tougher laws on libel and larger fines for protesters who step out of line – but the Kremlin denies a crackdown on dissent.

Human rights and opposition activists say 28 people face charges over last year’s rally. Several are in detention awaiting trial and some are under house arrest, accused of provoking violence.

(Additional reporting by Steve Gutterman and Maria Tsvetkova; Editing by Elizabeth Piper and Jon Boyle)