The government has been 80 percent formed," Prime Minister Sergei Stepashin told journalists at Sochi airport, after emerging from a marathon meeting with the president. But the prime minister looked drawn and spoke in a hoarse voice-it seemed forming the Cabinet was not an easy task. And that was before Mikhail Zadornov resigned as first deputy prime minister.

Stepashin and the head of the presidential administration, Alexander Voloshin, initially intended to arrive at Bocharov Ruchei-the presidential residence, where Boris Yeltsin is currently vacationing-on the afternoon of May 24. A two to three hour meeting was intended to end with the three agreeing upon and confirming the Cabinet's make-up. Stepashin and Voloshin were then supposed to return to Moscow that evening.

But an unexpected surprise awaited them in Sochi. Yeltsin was not alone in Bocharov Ruchei. At his side greeting guests was First Deputy Prime Minister Nikolai Aksyonenko.

Members of the first deputy prime minister's staff later told journalists that former Railways Minister Aksyonenko had made an unscheduled visit to Sochi in order to pay a surprise inspection to a local railroad workers' sanatorium. He happened to be passing the president's residence at noon on May 24 and decided to join the discussion on the new Cabinet's composition, Aksyonenko's staff explained.

In doing so, Aksyonenko appeared to confirm his earlier statement that he "wanted everything to be his business."

As a result, discussions on the government's composition were dragged out to three rounds over one-and-a-half days.

Stepashin and his current first deputy, Aksyonenko, hold diametrically opposing views on both the Cabinet's structure and the distribution of authority.

Aksyonenko is known to be a close friend of the president's family and influential billionaire tycoon Boris Berezovsky.

During the discussions, the prime minister, backed by Voloshin, attempted to persuade the president that the new Cabinet needed two first deputy prime ministers, and that the post of second first deputy should be occupied by Chairman of the State Duma Committee for finance, taxes and banking, Alexander Zhukov.

Aksyonenko pushed exactly the opposite point of view, arguing that one first deputy premier-himself-with responsibility cutting across all portfolios was enough for the government.

The discussion headed toward a stalemate. The presidential team would not consent to Zhukov's becoming second first deputy prime minister. Zhukov, the Duma's chief economist, whose nomination Sergei Stepashin actively lobbied, had previously said publicly the only government position he was interested in was that of first deputy prime minister.

That attitude did not ingratiate him with the Kremlin, which has actively discouraged such independence of spirit in the new Cabinet.

At the same time, it was not in the Kremlin's interests to support Aksyonenko's position either. Should Aksyonenko, Berezovsky's protege, gain control of the government's purse strings from his exclusive position in the new government, Berezovsky would acquire an even firmer grip on the system. Such concentrated influence by a single Kremlin clan would disturb the presidential team's traditional policy of ruling by playing groups against each other and provoking clashes where possible.

The parties could not find a solution to the problem until early on May 25, when Stepashin finally offered a compromise, proposing Finance Minister Mikhail Zadornov for second first deputy prime minister. Yeltsin backed the proposal.

Zadornov, informed of the nomination over the telephone, agreed to it with the sole provision that he retain his post as finance minister. Stepashin gave his consent to Zadornov's holding two offices and announced the decision to journalists at Sochi airport.

It cannot be said that Aksyonenko's visit to Sochi brought no results, however. Stepashin said Aksyonenko's presence in Sochi was part of an "operation" which he had coordinated with the president, and went on to describe Aksyonenko as his main deputy. Aksyonenko took every opportunity to repeat the same view in subsequent television and radio interviews.

Outlining the scope of his duties, Aksyonenko said he would handle industry and macro-economic policy. That in effect means the main first deputy prime minister would have, in addition to other duties, supervised the work of his colleague, Zadornov.

Stepashin also revealed some information about the composition of his government. Deputy Prime Minister for social affairs Valentina Matviyenko, brought into the government by former Prime Minister Yevgeny Primakov, has retained her post. Stepashin did not, however, name Vladimir Bulgak-a man who has served under three prime ministers and supervised fuel, electricity and other natural monopolies-which seems to indicate he will not be a member of the new government.

Rumor has it that Aksyonenko has held a grudge against Bulgak, who harshly criticized Aksyonenko while he was railroads minister. Vladimir Shcherbak, former deputy minister for food and agriculture, replaces former Deputy Prime Minister for agriculture Gennady Kulik. In addition to the post of deputy prime minister for agriculture, Shcherbak will take over as food and agriculture minister, replacing his former boss, Viktor Semenov.

Stepashin noted that the newly established post of deputy prime minister for the military industrial complex remained vacant. Former deputy minister of fuel and energy, Viktor Kalyuzhny, known for his friendly attitude toward oil companies Sibneft and LUKoil, which fall into Berezovsky's orbit, has replaced his former boss, Sergei Generalov-a long-standing enemy of the two oil companies.

Meanwhile, Kremlin loyalist Alexander Pochinok has replaced Georgy Boos-close to ambitious Moscow Mayor Yuri Luzhkov-as tax minister. Mikhail Fradkov, trade minister in former Prime Minster Viktor Chernomyrdin's government, returned to his former post, replacing Georgy Gabunia, a Primakov appointee.

The appointment of former Deputy Foreign Minister Leonid Drachevsky as minister for the CIS surprised many observers. His predecessor, Boris Pastukhov, had failed to forge good relations with the presidents of Uzbekistan, Georgia, Turkmenistan and Azerbaijan and did not suit the Kremlin.

Vyacheslav Mikhailov has been appointed minister for national and regional affairs, while his predecessor, Ramazan Abdulatipov, remains a government minister, and will supervise relations with Russia's regions and republics.

The main source of intrigue, however, developed around former "second" First Deputy Prime Minister Zadornov. After consulting with Voloshin on the plane back from Sochi, Stepashin retracted his earlier statement about Zadornov upon arriving in Moscow. Zadornov, he said, would now only be first deputy prime minister, and Mikhail Kasyanov, Zadornov's former first deputy, would take over as finance minister.

The news caught Kasyanov off-guard in London, and he promptly interrupted his talks with the London Club and rushed to Moscow.

On the evening of May 26, rumors swept the White House that Kasyanov and Zadornov were against such a division of powers in the Finance Ministry and were preparing to tender their resignations. It was believed Kasyanov, an expert in negotiations with international lenders, was not happy about having to deal with Russia's budget, while Zadornov would not consent to being a puppet deputy prime minister. The fragile new Cabinet seemed set to unravel when Boris Yeltsin returned to Moscow late on May 26 and urgently summoned Sergei Stepashin to the Kremlin.

At the time, the prime minister was attending a soccer match with Aksyonenko. But on this occasion, Stepashin went to see the president alone.

Sources within the government say the prime minister stood his ground and managed to win both positions for Zadornov. That victory lasted only two short days. Meanwhile, the main participants in the controversy remain silent about the issue.