Putin adviser baffled by Blair position on Centrica takeover

Andrei Illarionov, economic adviser to President Vladimir Putin for five years until the end of 2005, said that he was "puzzled" by comments from Tony Blair that Downing Street would not block a takeover of Centrica by state-owned Gazprom.

"It would be no different to selling Centrica to the Russian state," he told reporters after addressing a conference in London. "It would be like selling the electricity grid to Iran or Saudi Arabia ... state-owned companies do pose a threat to security of supply. They do not necessarily behave according to market rules."

After Gazprom stated its interest in buying Centrica earlier this year, Mr Blair made clear that he would not intervene, leaving scrutiny of any deal to the competition authorities. Gazprom produces and supplies around a quarter of Europe's gas, while Centrica owns British Gas, the leading UK domestic gas distributor.

"The principle of government is to have government control of your territory. This [deal] would be having another state next to your door. It would be a clear challenge to the monopoly of power," said Mr Illarionov, who has become a leading critic of president Putin.

Turning to the upcoming flotation of Russia's Rosneft energy giant in London, he said the $8bn (£4.3bn) fundraising should be shunned by investors. The company, to be valued at $60bn, includes key assets that were seized from Russian private group Yukos after it fell foul of the Kremlin.

"The London Stock Exchange will be used for distributing stolen assets... It is a crime."

He added that the listing of Rosneft would be reversed by a future Russian government, with the shares returned to Russia.

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