UPDATE 4-Russia releases Storchak from jail pending trial

(Adds Storchak quotes)

By Simon Shuster and Guy Faulconbridge

MOSCOW, Oct 21 (Reuters) - Russia released a deputy finance minister on Tuesday pending his trial for embezzlement, a move that may show Finance Minister Alexei Kudrin has checked attempts to undermine his position.

Kudrin, who has become the darling of investors by seeking to shield Russia's oil fund reserves from being squandered, said the decision showed justice had finally prevailed.

Sergei Storchak, who oversaw Russia's debt and its $163 billion oil wealth fund, was arrested last November and accused of attempting to embezzle $43 million in a complex deal with foreign debts owed to Russia.

With long wavy hair, the 54-year-old walked out of the Lefortovo high-security prison in Moscow to applause and flowers from supporters.

He thanked his family, lawyers and Kudrin for their support, but said he was surprised by the decision to release him.

"We tried to lobby for this decision, to push it through, but nevertheless it is very surprising," Storchak told reporters.

"We have a great feeling of thanks for the Finance Ministry headed by Alexei Leonidovich Kudrin who in different ways supported me through all this."

Kudrin's support "has allowed me to work, to keep working even here. My desire to work has not waned," he added. When asked if he would return to work, he said: "Yes."

Storchak said he had no idea why he had been taken into custody and has repeatedly denied the charges against him.

Supporters say the case was a direct attack on Kudrin and part of a wider Kremlin power struggle between those seeking to gain control of Russia's giant reserves.

Investors have been closely watching the case, although markets did not move on the news he was to be released.

KUDRIN'S INFLUENCE

Explaining the decision to free Storchak, a spokesman for the investigative committee of the prosecutor-general's office said in a statement that the accused was not in a position to influence the investigation if released.