Russian defence minister resigns - PM

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MOSCOW, Sep 18 (Reuters) Defence Minister Anatoly Serdyukov has resigned, Russia's new prime minister said today as President Vladimir Putin considered his proposed cabinet lineup.

''I spoke with Serdyukov and we came to a decision that considering our close family ties he should submit his resignation,'' Prime Minister Viktor Zubkov, who is related to Serdyukov, was shown saying on Russian television.

After meeting Putin at his Bocharov Ruchei residence in the Black Sea resort of Sochi, Zubkov said he had submitted the proposed cabinet lineup to Putin for consideration and that the government's new structure would be announced by Friday.

''The structure (of the government) will be decided within the period which is defined by the law -- within seven days after my appointment,'' Zubkov said.

Zubkov said Serdyukov, who is married to his daughter, had informed Putin about his wish not to be in the next cabinet.

Zubkov, previously head of a money-laundering watchdog, was appointed by Putin to replace Mikhail Fradkov on Friday after being confirmed in his post by the lower house of parliament.

One of a tight circle of colleagues who worked alongside Putin in St Petersburg City Hall in the early 1990s, Zubkov has pledged changes to the government's structure.

Kremlin watchers seeking clues about the direction of Russian policy during the election year -- and after -- are waiting to see which ministers will be dropped from the cabinet.

Russian newspapers have speculated that reformers such as Economy Minister German Gref, who has presided over the longest Russian boom for a generation, could leave the cabinet.

Putin's appointment of Zubkov, 66, is seen by investors as the start of a process that will culminate in a hand-picked successor being elected president in March 2008.

After two four-year terms in office, Putin must relinquish the presidency in 2008, though he has hinted he will try to preserve influence. Some observers expect him to use his wide popularity to return to power at a later date.

Serdyukov, a former tax official, was appointed by Putin in February to replace Sergei Ivanov, who was then promoted to first deputy prime minister.

Since his appointment, Serdyukov, 45, has dismissed key military figures who were appointed under Ivanov, seen as one of the leading candidates for the presidency.

REUTERS RC BST0104

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