Vladimir Potanin's appointment is seen as a move which may strengthen the free-market camp, as he is believed to share many of the liberal views of Anatoly Chubais, the former head of Russia's privatisation programme.
Mr Potanin, head of a commercial bank, will take over responsibility for economic policy from the former Avtovaz boss, Vladimir Kadannikov, 54, whose appointment in January led to dismay in the West, because he was seen as a Soviet-style hard-line industrialist. Although he has been less Draconian than many feared, there have been mutterings about his lack of economic knowledge.
The new cabinet announced yesterday by the Prime Minister, Viktor Chernomyrdin, along with plans to streamline government, includes Viktor Ilyushin, a top Kremlim aide, and Alexei Bolshakov, a relatively junior minister. They become First Deputy Prime Ministers.