The most outspoken economic adviser to Vladimir Putin, the Russian President, has stepped down.

Andrei Illarionov's resignation will reinforce fears that the Kremlin is determined to flush out dissenters at a time when the Russian Government is extending dramatically its control over the country’s economy.

Mr Illarionov last year called the decision to strip Yukos, the massive oil company, of its assets as "the scam of the year".

Mikhail Khordokovsky, Yukos's founder, was subsequently sentenced to nine years in prison for fraud and tax evasion. His prosecution was widely regarded as politically motivated after he funded opposition groups.

After a series of similar outbursts, Mr Illarionov had already been stripped of many of his duties as an official economic advisor to President Putin. However, his resignation is likely to be taken as a sign of the Kremlin’s tightening grip on Russian economic policy.

"A little while ago, I handed in a note that I am leaving the post of adviser. There are many reasons for this," Mr Illarionov said today.

"Up to now, while there was the possibility of doing something, including speaking out, I thought it was important to remain in this post. Now the situation has changed."

Mr Illarionov last week attacked Russia’s transformation into a "corporate" state, dominated by state-owned companies.

He said that political freedom in the country had steadily declined, while government-controlled corporations stifled competition and ignored public interests.

Mr Illarionov cited the nationalisation of the biggest oil fields formerly owned by Yukos to reclaim billions in disputed tax bills and the purchase of Sibneft by state-owned Gazprom as examples of the state’s expansion into the strategically important energy sector.

Dmitry Medvedev, Gazprom’s chairman, is also Russia's deputy prime minister.

Mr Illarionov added that since Rosneft, which is state-owned, had taken over Yukos’ main subsidiary, Yuganskneftegaz, the Siberian unit’s revenues had dropped while costs soared.

The Kremlin has recently moved to make Russian assets more attractive to western investors. Earlier this week, President Putin signed documents to open up share trading in Gazprom, the world's largest gas producer, moving the company a step closer to becoming the top global emerging markets stock.

Russia's main share index has gained 80 per cent this year. However, under previous rules, foreigners could buy only London-listed American depositary shares in Gazprom. Foreign ownership of Gazprom was capped at 20 per cent.

"This is the Russian version of Saudi Aramco being opened up to foreigners," Bill Browder, head of Hermitage Capital, the Moscow-based investment fund, told the Wall Street Journal.

"It's a great Christmas present for the market."

Underscoring its stock's attraction to western buyers, Gazprom could earn more than $3 billion (£1.7bn) next year by raising prices in Ukraine, according to analysts.

Gazprom is threatening to cut off gas flows on January 1 if Ukraine does not agree to pay quadrupled prices for the energy that comprises a third of its needs.

However, such a move would be open to interpretation as a punishment for the anti-Moscow sentiment that fuelled Ukraine's "orange revolution" earlier this year. As such it would sit uneasily with many in the West, who supported Victor Yushenko's election as President.

A Gazprom spokesman told the New York Times: "We are looking for institutional investors". He named Calpers, the Californian Public Employees Retirement System, as "our dream investor".

However, leading western fund managers said that Gazprom stock still had to be accepted as "a political arm of the Russian government".