Lebed denies threatening the West

Alexander Lebed, favourite as Russia's next president, was last night frantically distancing himself from an interview in which he declared that Russia would take economic revenge against the US and Germany if Nato goes ahead with plans to expand into Eastern Europe.

The security chief, who has a reputation for being outspoken, was quoted in the Daily Telegraph saying the two countries' "huge interests" in Russia would "suffer directly" if expansion plans succeeded. "We will find ways to hit the proponents of these policies where it hurts," he reportedly said.

Such remarks will have caused alarm in the West, which will see them as further evidence that he will adopt an anti-Western foreign policy if he wins the Kremlin's top job. Ever since Mr Yeltsin appointed him Secretary of the Security Council in June, Western observers have been trying to work out if the retired two-star general is a hardline or moderate nationalist.

It will also cause surpise, as he has recently taken a more relaxed view of Nato's ambitions, pointing out that they are free to squander their money by expanding, as Russia has no plans to threaten countries outside its borders.

In the article published yesterday, Mr Lebed's tone appeared to have changed sharply. This was despite recent signs that Russia is prepared to negotiate with Nato, even though it remains formally opposed to its expansion.

Mr Lebed also reportedly said that Germany's determination to see Nato and the EU push eastwards would placeCentral and Eastern Europe under German domination, and suggested "post-unification policy-makers" were "building a Fourth Reich". He blasted the Americans, accusing them of attempting to control world trade "by diktat from Washington" and of acting "beyond belief, beyond logic" in bombing Iraq.

Yesterday, after being bombarded by inquiries, his press service tried to distance itself from the article by denying he had granted an interview to the Daily Telegraph, and saying the "facts quoted have nothing to do with what he has ever told reporters". It issued a statement describing the interview as a "fraud", and "a provocation ... organised against a person who has stopped the Chechen war".

Sources at the Daily Telegraph said the interview with Mr Lebed was authentic.