A senior adviser and close ally of Russia's president Dmitry Medvedev became the first official to admit publicly that Vladimir Putin remains the country's real power.

Igor Yurgens, one of Mr Medvedev's most trusted aides, acknowledged that Mr Putin took most of his presidential authority with him when he became prime minister earlier this month.

"There are difficulties in having a very strong president and a new but not so strong – bureaucratically, I mean, not intellectually – president," Mr Yurgens told European business executives at a conference in Moscow.

He added: "Things are in a state of flux."

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His comments will come as little surprise to critics who have suspected Mr Putin's job swap was little more than a power grab that circumvented a constitutional prohibition on the former KGB spy serving a third presidential term.

But they also reveal tensions between Russia's two centres of power, bolstering the fears of those who say the system is so unwieldy it could destabilise the government.

In one of his first acts after winning the election in March, Mr Medvedev created an advisory body, the Institute of Modern Development, to oversee economic strategy and reform. He appointed Mr Yurgens, an economist, to head the centre.

Yet he has been unable to develop his powerbase any further.

Since Mr Medvedev was inaugurated on May 7, both the cabinet and the presidential administration have been filled with apparatchiks who owe their careers to Mr Putin.

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