Russia military denies top brass revolt over cuts

MOSCOW (Reuters) - Russia's military took the unusual step on Wednesday of denying media reports that the country's most senior general has tendered his resignation in a row with Defense Minister Anatoly Serdyukov.

Russian newspapers, citing unnamed military sources, reported this week that the chief of general staff, General Yuri Baluyevsky, and some of his aides had offered to resign in protest at planned staff cuts.

President Vladimir Putin has increased funding for the 1.2 million-strong armed forces but he has made clear he wants them to be cost effective. His appointment of Serdyukov, a former tax official with no military background, has irked the top brass.

"The information and public relations department views such publications as irresponsible and states that all 'facts' cited in these publications are not true," the ministry press office said in a statement.

"No decision has been made so far on these problems (possible cuts) which are still being carefully considered," it added. "And indeed, no top-level offers of resignation exist."

Strong economic growth has allowed the government to increase budget funds allocated to the military by about 30 percent each year.

For the first time in years the military is taking receipt of new ships and its bombers have resumed long-range patrols after long periods stranded on the ground because of a shortage of fuel and spare parts.

Kremlin sources have said that Serdyukov, the 45-year-old son-in-law of Prime Minister Viktor Zubkov, was tasked to make sure the cash injection was used efficiently.

Serdyukov ran a furniture business in the 1990s before becoming a tax inspector.

Rumors of disagreements between the top generals and the minister appeared after report quoting military sources was leaked to media that Serdyukov was planning to sell off land owned by the military and cut the number of non-combat officers.

The report said the plans could involve a 40 percent cut in the number of military journalists, doctors and officers working in the ministry and the general staff. The Defense Ministry has not confirmed the cut-backs.

"The ministry's priority now is finance," said retired Colonel-General Leonid Ivashov, summing up the military's grievances in a newspaper interview earlier this month.

"Money, rather than battle readiness or the level of technical equipment, has become paramount," said Ivashov, whose Academy of Geo-political Problems think-tank is close to the military establishment.

Baluyevsky has never commented publicly on any disputes inside the ministry. But in a rare display of dissent, he spoke out against a Kremlin plan to relocate the navy's staff headquarters from Moscow to St Petersburg.

Baluyevsky did not take part in talks earlier this month with visiting U.S. Defense Secretary Robert Gates, fuelling speculation about his possible departure. The general met Gates on his previous visit to Moscow last year.

The ministry said Baluyevsky missed this month's meeting because he was on vacation. State-run Rossiya television said on Wednesday he was now back at work.