Impact of Yukos moves

The new Kremlin chief of staff said in remarks broadcast yesterday that prosecutors launching legal action against Russian oil giant Yukos should consider the economic impact of all the measures they took.

Dmitry Medvedev, appointed last week, also said it was not clear to him whether the freezing by prosecutors of a major stake in Yukos, three days after its head was arrested, had been an effective measure.

"The question arises: how effective legally was the freezing of Yukos shares? These shares are owned offshore and can be used as compensation for damages. The legal effectiveness of such measures is not clear," he told Rossiya state television.

"Our colleagues should probably consider all the economic consequences of measures they take."

Medvedev's appointment followed the resignation of longstanding chief of staff Alexander Voloshin, thought to have been sympathetic to Yukos chief executive Mikhail Khodorkovsky, Russia's wealthiest man.

President Vladimir Putin rejected calls by top industrialists to discuss Khodorkovsky's detention, saying it was a matter strictly for the courts. But Prime Minister Mikhail Kasyanov said he was "deeply concerned" at events.

Medvedev, 38, said law enforcement authorities were "a very serious instrument and generate a strong reaction in various spheres and their activity could give rise to some sort of administrative frenzy.

"This is a dangerous thing as the consequences of measures not fully thought out will have an immediate effect on the economy and cause indignation in politics."