A Russian minister has been put under house arrest for two months in connection with an alleged £1.6m bribe.

Economic development minister Alexei Ulyukayev - a liberal who has been critical of the government - is the most senior official to come under investigation and face charges since 1991.

Mr Ulyukayev was detained on Monday night accused of taking a bribe in a sting set up by the FSB, the successor to the KGB.

He allegedly took money for allowing oil giant Rosneft to buy a stake in another oil company, Bashneft.

Investigative Committee spokeswoman Svetlana Petrenko told RIA Novosti news agency: "This is about extortion of a bribe from Rosneft representatives accompanied by threats.


Image: Alexei Ulyukayev is known to be a liberal and has opposed President Putin over some business plans

"Ulyukayev was caught red-handed as he received a bribe," she said, adding that "the acquisition of the Bashneft shares was carried out on a legal basis and is not the subject of the criminal investigation".

A Kremlin spokesman told Interfax news agency: "This is a very serious accusation that requires very serious proof. In any case only a court can decide."

Vladimir Putin was reportedly informed of the operation that led to the minister's arrest.

A spokesman for Rosneft would not comment except to say it had acquired the Bashneft stake "in accordance with Russian law on the basis of the best commercial offer made to the operating bank".

Mr Ulyukayev had originally been against Rosneft's bidding for Bashneft, arguing it was wrong for a state-owned company to take part in the privatisation drive.

In contrast, President Putin wanted the deal, saying it was not simply a transfer of assets from one part of the state to another because Rosneft had minority foreign investors.

The 60-year old minister, in the post since 2013, is known to be a liberal who has spoken out against increasing government involvement in the Russian economy.

Russian Prime Minister Dmitry Medvedev said he did not understand what had happened to the economy minister and his conversations with Mr Putin led him to believe the President was of the same opinion.

He was placed under house arrest until 15 January after being charged with extorting a bribe. If convicted, he could face up to 15 years in prison.