THERE is a struggle for power and influence in the Kremlin, reckons Mikhail Gorbachev, and if the wrong people win, it could set Russia on a destabilising course.

The man who brought an end to Soviet communism is backing Vladimir Putin. It seems to be more than just courtesy to an imcumbent Russian President from a former leader. Mr Gorbachev is retired from politics and this week was in London, participating in the Leaders in London conference. Speaking to The Times, the former General Secretary of the Communist Party of the Soviet Union, said that there were those within the Russian Government who would like to co-opt the agenda and set Russia on a different course.

This talk might set off familiar alarms among business analysts and Washington conservatives but they would be hearing the wrong bells. Mr Gorbachev does not fear a leftist conspiracy, the so-called siloviki, a hawkish group of former KGB officers that some say is steering the President in an anti-business direction.

For Mr Gorbachev, the danger comes from the right. “There is a real battle going on in the cabinet; there are differing approaches,” he says. He blames “neo-liberals” in the Government for pushing policies that would not benefit the Russian people.

Who are these neo-liberals? “We see them everyday, the ministers of finance and economy,” Mr Gorbachev said. He points to the Government’s attempt late last year to monetise Soviet-era social benefits, such as free public transport, medicines and electricity for pensioners, replacing them with cash payments.

Public outrage against what was seen as the Government’s attempt to shirk its responsibilities led to the first mass protests in Russia since the fall of communism. He fears that there would have been social unrest had the Government been allowed to continue with the policies. “It was winter, it was cold,” he said.

According to Mr Gorbachev, it was President Putin’s intervention that caused the withdrawal of some of the measures. “ I would like him to succeed in economic modernisation for the benefit of the people,” he said.

Mr Gorbachev’s personal charm is well documented; he won over President Reagan during the arms talks in the 1980s and made friends with Margaret Thatcher, whom he visited while in London this week. Still, for a man who led a much-feared totalitarian state, Mr Gorbachev is disarming and without pomposity. Short in stature, he is animated, fixing you with his gaze and requests, through his interpreter, questions that are to the point and not too broad.

Thrown off balance by a plea for accuracy from a (former) politician, Mr Gorbachev took over. “There might be some slippage to authoritarianism but there can be no return to communism (in Russia),” he said, dismissing those who worry about Russia as a stable place for investment. “China is stable even though the regime is authoritarian.”

Nor does he have time for the critics of President Putin’s attack on Mikhail Khodorkovsky, the former Yukos chief executive who is serving a jail sentence for tax evasion. Indeed, he seems to suggest further initiatives against the business oligarchs would not be unwelcome.

The unravelling of the Soviet Union in 1989 when the republics broke free was Mr Gorbachev’s downfall. Unpopular and stripped of his Union, the Soviet leader was supplanted by Boris Yeltsin, who approved the massive sell-off of Russia’s oil production associations.

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“They were a mistake,” he said, but insists he is in favour of the market economy. Attitudes are changing and big business in Russia is adapting to a political climate less tolerant of the selfish pursuit of private gain for its own end.

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