Russian Finance Minister Alexei Kudrin resigned yesterday after rebelling against a plan to install President Dmitry Medvedev as Prime Minister when Vladimir Putin returns to the Kremlin in 2012.

Mr Kudrin is the first top official to quit in connection with the scheme announced at the weekend for Mr Putin, currently Prime Minister, and Mr Medvedev to swap jobs after March 2012 Presidential elections.

The resignation brought a dramatic end to Mr Kudrin’s career as finance minister, which started back in 2000 and had seen him become the longest serving current finance minister of any world power.

“The President of the Russian Federation signed the decree on the finance minister’s resignation,” Kremlin spokesman Natalya Timakova said in a statement.

Mr Kudrin, who had also served as a deputy prime minister, himself confirmed to the RIA Novosti news agency that he had resigned. The minister had at the weekend told reporters in the US he could not imagine serving in a government led by Mr Medvedev.

Dropping the caution characteristic of a trained economist, Mr Kudrin revealed that he had experienced major differences with Mr Medvedev, particularly over a ramping up of military spending that risks bloating the budget deficit.

“I do not see myself in the new government... I think that the differences that I have will not allow me to be in this government,” Mr Kudrin said. Mr Medvedev reacted furiously to the comments and subjected Mr Kudrin to an extraordinary public dressing-down reminiscent of the humiliations of officials from Soviet times.

“If you do not agree with the policy of the President, which is executed by the government, then you have one option – to resign,” Mr Medvedev told Mr Kudrin in comments broadcast on the main evening news.

Russia’s new power scheme has yet to provoke any mass protests beyond a small rally in Moscow on Sunday. But there have been murmurings of discontent and the last Soviet leader Mikhail Gorbachev had earlier said Russia was at an “impasse” and doubted whether Mr Putin – who served two terms as President to 2008 – was the man to implement change.

“It will be his mistake if the future president leaves everything without changes, thinks only about how to stay in power and tries to keep the old team – who are the ones to blame for how things are,” Mr Gorbachev said.

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