At the same time, he re-appointed former prime minister Viktor Chernomyrdin, interim Prime Minister. Yeltsin fired Chernomyrdin last March after which he appointed his protege, 34-year-old Kiriyenko as Russia's Prime Minister.

Kiriyenko offered to resign last week during an urgent meeting with Yeltsin at his country residence `Rus' outside Moscow, on the eve of the extraordinary session of the State Duma, lower house, convened to discuss the current financial crisis, in the wake of the devaluation of the rouble.Yeltsin asked him to continue till further orders.

Observers say Kiriyenko's dismissal was triggered by the financial crisis. On Friday, Kiriyenko unsuccessfully tried to explain the measures the government was taking to overcome the crisis.

Since his Government's extremely unpopular move to devalue the rouble, the President offered nowords of guidance or leadership. The devaluation, after his vow three days before that there would be no devaluation, left common Russians stunned.

Although he broke his silence on Friday, condemning the US air strikes on the training facilities for the terrorists in Afghanistan and pharmaceutical factory in Sudan, Yeltsin spoke nothing about the current financial crisis. The ongoing crisis re-catapulted Chernomyrdin to prominence, who broke off his vacation on the Black Sea resort of Sochi to return to Moscow, on the eve of the emergency session of Parliament.

He immediately threw himself into a round of parleys with Opposition leaders, including Yeltsin's arch foes Communist Party leader Gennady Zyuganov and maverick General Alexander Lebed. At the same time, he launched an uncharacteristically scathing attack on Kiriyenko.

Since assuming office Kiriyenko had been battling a mounting financial crisis and he sought to stem a burgeoning hole in the federal budget which had forced the government toborrow heavily.

Mounting fears that the government would be unable to meet its debt repayments touched off an investor panic which saw stocks collapse shares have lost more than 80 per cent of their value this year and the ruble came under enormous pressure.

As the crisis deepened the government turned to the International Monetary Fund for help, but a 22.6 billion dollar bailout led by the fund, agreed in July, failed to restore calm.

When the Opposition-dominated Parliament rejected or gutted key sections of a Kiriyenko austerity package aimed at putting the country's finances on a long-term healthy footing the investor haemhorrhage gathered pace. The last straw came on Monday when the government cut the rouble free of its dollar peg, saying it would allow the currency to drift down to 9.5 to the dollar by year's end.

Simultaneously it froze the domestic debt market pending a radical restructuring, slapped a 90-day moratorium on debt payments to foreign creditors by commercial banks.