A Russian billionaire has headed a pro-business party in what appeared to be a revision of a Kremlin ban on oligarchs entering politics.

Mikhail Prokhorov, rated as Russia's third richest man by Forbes Magazine with an estimated fortune of $18 billion, on Saturday was elected leader of the Just Cause party.

It is for the first time that a 10-year-old pact between then President Vladimir Putin and Russian oligarchs has been breached. Under the deal the Kremlin amnestied the oligarchs' fortunes amassed through the semi-criminal selloff of state assets in exchange for their promise to stay out of politics. When oil tycoon Mikhail Khodorkovsky defied the pact he was swiftly put behind bars on charges of tax evasion.

This time Mr. Prokhorov joined the political fray with the approval of the ruling tandem of President Dmitry Medvedev and Prime Minister Putin. Mr. Prokhorov's task is to breathe life into moribund liberal party formed three years ago and revive falling public interest in politics ahead of parliamentary elections later this year.

In his acceptance speech at the party congress on Saturday Mr. Prokhorov sought to dispel the impression that he is a Kremlin stooge, criticising Russia's political and economic system.

“Our country is called the Russian Federation, but it is essentially an empire. Only presidential power works here. This form of governance cannot provide stability let alone development,” he told the party congress.

“Our country is systemically degenerating: industry has collapsed, and we are nothing but a supplier of raw materials, although quite a powerful one,” he said to an ovation from more than 170 delegates.

Mr. Prokhorov earned his wealth as a co-owner of the Norilsk Nickel plant, the world's largest producer of platinum. Two years ago sold his stake and now heads the Onexim group, an investment firm with big interests in mining, new technologies, media and banking.

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