Mikhail Fradkov (left) is a former tax chief

The speaker of the Russian parliament, himself a former interior minister and a close associate of Mr Putin, described Mr Fradkov as a true fighter against corruption.

But some analysts - especially in the world of business - have questioned his nomination.

And the choice of Mr Fradkov seems unlikely to end intense speculation over the future of reform in Russia.

Where next?

President Putin has never failed to surprise both his own people and the international community.

The appointment of a former tax policeman shows that tax collection will be a key priority for Putin Ivan Mazalov, Prosperity Capital Management

His unexpected dismissal last week of Russia's respected prime minister, Mikhail Kasyanov, was mainly seen as a ploy to enliven an otherwise lacklustre presidential election campaign.

But it also posed - again - a number of questions preoccupying many Russian and international analysts.

Namely, is a big change in policy looming? Does Mr Putin intend to continue with radical reform? Or is he planning to move towards a more socially-oriented system?

Most crucially, when Russians view their leader as more of a figurehead than a politician with specific ideas, does policy even matter?

The key to answering this question appears to be in how Mr Putin has shaped Russian political life.

Power grab

The media, big business and even parliament, have seen their influence reduced in recent months.

He is a man who will not spook foreign investors Igor Bunin, political analyst

The Kremlin has asserted its authority especially ruthlessly against Russia's super-rich business elite, launching a tax investigation against oil giant Yukos, and imprisoning its former chief, Mikhail Khodorkovsky, on fraud charges.

The clampdown is widely believed to have come in response to Mr Khodorkovsky's support for opposition liberal groups.

Real power is now concentrated in the presidency and Mr Putin's tight circle of trusted associates - many drawn from the security services.

Against this backdrop, Mr Fradkov is seen as something of an enigma.

Even-handed

He worked firstly in a series of Soviet state organisations, then Russia's secretive security council and feared tax police.

Some analysts believe that his former role as a tax enforcer signals that the Kremlin will continue to take a close interest in the tax affairs of Russia's major corporations.

"The appointment of a former tax policeman shows that tax collection will be a key priority for Putin," said Ivan Mazalov at Prosperity Capital Management.

However, Mr Fradkov, who most recently served as Russia's envoy to the European Union, is also seen as a skilled diplomat with a strong grounding in trade issues.

"He is a man who will not spook Western investors because he is a good negotiator who has good external relations," said Russian political analyst Igor Bunin.

Russia's financial markets reacted calmly to Mr Fradkov's appointment, with the main share index recovering quickly after an initial decline.

On the foreign exchange markets, the rouble fell slightly against the dollar, reflecting investor uncertainty over what the reshuffle meant for the economy.