MINSK (Reuters) - In the shadow of disused Soviet-era factories in Minsk, a street lined with eclectic bars, art galleries and yoga studios has become a haven from the vigilant eyes of the Belarussian authorities.

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“This place is like an island,” said Yegor, 21, who works at popular bar Hooligan. “It’s the street of freedom.”

The government of President Alexander Lukashenko, who has ruled Belarus for the past 23 years and has boasted that he is “the last and only dictator in Europe” ,has little tolerance for any opposition. A powerful police force and feared state security keep citizens in check.

But police patrols are rare in Oktyabrskaya, partly due to its location on an out-of-the-way peninsula in a bend of the river Svislach.

When the first restaurant opened there in 2012, few visitors came but now it ranks among the most fashionable quarters of Minsk.

Such is the growing popularity of that Oktyabrskaya that investors such as Belgazprombank, a subsidiary of state-owned Russian lender Gazprombank, have big plans for the district.

Earlier this year the bank purchased part of a factory there and intends to turn it into a gallery, restaurant and theater complex.

The manufacturing sector has not entirely abandoned Oktyabrskaya - one machine-making factory named after the 1917 October Revolution (MZOR) still operates there.

Financial difficulties prompted state-owned MZOR to lease or sell some of its facilities to Oktyabrskaya’s developers, but the firm still maintains some production with a reduced workforce.

Mikhail, who has worked at the factory for 42 years, said he approves of the influx of new ‘hipster’ businesses.

“The street has come back to life,” he said.

Oktyabrskaya’s long-term future ultimately depends on the authorities good favor, cultural analyst Maksim Zhbankov said.

“For now they tolerate it. But I can’t say that someone won’t turn up tomorrow and say they’ve decided to tear it all down,” he said.