Russia has announced plans to raise $8.5bn (�5.4bn) to help Russian business and to refinance some of the government's debts.

A stake in the holding company which controls Rostelekom may be sold

Prime Minister Mikhail Kasyanov said the government hoped to raise about $1.5bn by selling off state-owned assets and a further $7bn by borrowing money.

In total, 450 state-owned firms and stakes in a further 600 could be included in next year's sell-off.

The loans are expected to come from Russian and international investors, from banks and from other governments.

Competitive firms

Parts of the telecoms giant Rostelekom is expected to be up for grabs next year - indirectly via a minority stake in Svyazinvest, the state telecoms holding firm which controls it.

The Svyazinvest stake is expected to account for 70% of the cash the government hopes to raise from privatisations next year.

In addition, a stake of between 5% and 20% in the oil company Slavneft and a 6% stake in the oil giant Lukoil may be hived off, along with a 17% stake in Magnitogorsk Metals Plant.

Russia wants to borrow money from domestic investors

"From previous experience, we have learned that one should privatise companies that have strong potential for competition," Mr Kasyanov said.

"Infrastructure should remain in state hands."

There are 9,810 state-owned enterprises in Russia. In addition, the government owns stakes in a further 4,354.

Borrowing money

Russia's domestic bond issues should raise $5.3bn.

Investors in the international financial markets should be offered $1bn worth of bonds.

About $640m could be raised as loans from banks and companies, as well as from financial organisations and from other governments.

And the International Bank of Reconstruction and Development is expected to lend Russia $40m.

Russia must pay back debts of about $17bn in 2003.