WHEN Andrei Illarionov joined the Kremlin as an economic adviser in 2000, he and most of the Western world were convinced that Russia was finally heading towards a brighter, freer future.

For five years he advised President Putin and headed Russia’s negotiations with the G8, which Russia joined in 1997 as a reward for its liberal political and economic reforms.

But yesterday — five days before Russia takes over the rotating G8 presidency for the first time — Mr Illarionov resigned from the Kremlin, saying that his country was no longer politically or economically free.

“It is one thing to work in a country that is partly free. It is another thing when the political system has changed, and the country has stopped being free and democratic,” he told reporters. “I did not go to work for such a country.”

Mr Illarionov, 44, had been sidelined since he described last year’s forced renationalisation of the oil company Yukos as the “scam of the year” and was replaced as Russia’s G8 “sherpa” in January.

But his resignation will fuel concern in the West that Russia is not fit to lead the G8 group of leading industrialised nations, comprising Britain, the United States, Japan, France, Germany, Italy and Canada.

Mr Putin wants to use the presidency to reclaim Russia’s status as a world power and to focus the G8 on issues affecting the former Soviet Union — energy security, education and health.

The G8 summit in St Petersburg is supposed to be the high point of his presidency, and by the end of the year he hopes to win full membership of the group, whose finance ministers still meet as the G7.

But after recent moves by the Kremlin to curb democracy Western leaders are under pressure to deny Russia full membership, boycott its G8 summit, or even evict it from the club altogether.

“Russia’s leaders are making a mockery of the G8 by failing to live up to the basic norms of a democratic society,” said Tom Lantos, a US congressman who co-sponsored a bipartisan resolution demanding Russia’s eviction from the G8.

Transparency International, the corruption watchdog, this month asked whether Russia can live up to its obligations as G8 president to fight corruption.

Lyudmila Alexeyeva, head of the Moscow Helsinki Group, Russia’s oldest human rights organisation, said: “Russia is not free and it’s nonsense for the G8 presidency to go to a country that is not free.” Economically, Mr Illarionov said that Russia had changed from a liberal system to a state-dominated one in which giant public companies were controlled by self-interested bureaucrats.

Western diplomats complain that in its foreign policy Mr Putin’s Russia has repeatedly sided with “pariah states” including Iran, Syria and Uzbekistan. “It just seems that the Russians always stick a spanner in the works,” said one.