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Top Russian Official Quits

Russia's fledgling government was thrown into turmoil late on Friday when centrist Deputy Prime Minister Alexander Shokhin stormed out of the cabinet nine days after he was appointed.

Prime Minister Yevgeny Primakov, who had seemed at last close to completing his cabinet team, angrily lashed Shokhin's resignation as "irresponsible" and "capricious" in the hard times of Russia's severe economic crisis, but he said that the move would not weaken the government.

President Boris Yeltsin and Primakov appointed 10 more ministers on Friday. Among them was liberal Mikhail Zadornov who, after much hesitation on Primakov's part, retained the finance portfolio.

That enraged Shokhin, who was in charge of relations with Russia's major international creditors. He described the reappointment as a "political mistake" and said he held Zadornov responsible for Russia's debt freeze and collapsing ruble.

"The reappointment means that the government is ready to become the heir to the decisions made by the previous cabinet and the central bank," Shokhin told NTV television.

Primakov's statement left no doubts the new premier was enraged.

"I think this is irresponsible, especially at such a difficult time, with regard to the country, to the government and to the president who had done Shokhin a great favour by appointing him to such an important post," he said.

Shokhin has quit before, and on similar grounds. In 1994, he stormed out of Viktor Chernomyrdin's cabinet.

Later on Friday, Russian news agencies reported that the head of Russia's securities watchdog, reform-minded Dmitry Vasilyev, had also quit over Zadornov's appointment.

Vasilyev, whose Federal Securities Commission is seen as largely ineffective and who has little political clout, is an ally of Zadornov's mentor, reform guru Anatoly Chubais. He was not known to have had problems with Zadornov in the past.

The biggest risk from Zadornov's appointment had seemed to come from the Communists, who forced Yeltsin to drop his earlier attempts to re-install former premier Viktor Chernomyrdin as prime minister two weeks ago. They have sounded more and more skeptical that the former foreign minister would break with the monetarist, free-market ideas of the past seven years.

But in the end it was Shokhin, formerly parliamentary leader of Chernomyrdin's Our Home is Russia party, who could not accept the appointment of Zadornov.

Shokhin had been conducting negotiations with the International Monetary Fund and the World Bank since taking office last week -- a role he previously filled in 1994.

"I did not want to be a fig leaf talking to the West without being sure that the ministries I was overseeing would be guiding the policies I could be responsible for," he said.

An International Monetary Fund team wrapped up a visit to Russia Friday without recommending that Moscow recive the next installment on a $22.6 billion loan package.

Russia needs the IMF money to help stabilize an economy wracked by surging inflation, rising unemployment and a falling currency. But the IMF team left without agreeing to release additional money and will return for further negotiations on Oct. 12, the Interfax news agency reported.

Shokhin's departure -- and the disarray it confirmed at the heart of the coalition government -- could be a major setback in attempts to win back the confidence of international investors and domestic savers.

Meanwhile, Zadornov's appointment was welcomed by some Western analysts.

"At least he is a known quantity," Stephen O'Sullivan of the finance house United Financial Group said after the Kremlin ended days of speculation over who would get the post.

Primakov, who was confirmed by Russia's parliament on September 11, vowed to put together a consensus cabinet to reflect the disparate strands of opinion on how to tackle Russia's economic crisis. He promised not to ditch reforms but to ease the burden on Russia's long-suffering people.

Two weeks on, he has yet to complete his team and policy program.

©1998 CBS Worldwide Corp. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press and Reuters contributed to this report