The federal government appears to have found a way to protect residents of the Rechnik settlement from Moscow city authorities, using a "fantastic" scenario proposed by the Economic Development Ministry.

The Prosecutor General's Office and the Kremlin's control department have reported back to President Dmitry Medvedev on how to check the legality of the demolitions in Rechnik, after Medvedev ordered them to look into the matter on Feb. 4.

The government has proposed creating a working group that would include representatives from the city government and the Federal Property Management Service, the Kremlin press service said. The officials would look into the disputes over each individual plot of land.

A legal method has already been found to save the houses in Rechnik that are on federally owned land, Vedomosti has learned.

"The Russian Federation has the right to file a lawsuit asking the court to recognize its rights as the owner of the houses under Article 222 of the Civil Code, after which it will rent the houses in Rechnik to their owners," said an official in one of the state agencies involved in the discussions.

The owners' expenses to build the houses would count toward the rent, the source said.

"The method looks fantastic, but there's nothing else. Every possible procedure was violated, and the settlement's residents were warned about the violations back in the 1960s and 1970s. On top of that, the houses are sitting on a dike," the source said.

A decision has not been made, said another official with knowledge of the situation. "The option is being discussed behind closed doors," the official said.

Everyone involved in the resolution of the Rechnik clash is reporting directly to Medvedev, said a source in the presidential administration.

"Work on the Rechnik matter is going strong. You're not going to have to wait long for news," said a second source in the Kremlin.

The demolition of homes began on the night of Jan. 21 on court orders. Moscow's Kuntsevsky District Court ruled that the homes were built illegally because the settlement is in the protected Moskvoretsky Park. Residents argued that the court orders had not yet gone into force.

In total, 22 of the 295 buildings in the settlement were razed, according to the group Rechnik, which is contesting the demolitions. After several days, a commission of the Public Chamber and the Federal Court Marshals Service intervened, which temporarily halted the demolitions. The residents, in turn, tried to block Tverskaya Ulitsa and sued Moscow city authorities for 100 billion rubles ($3.34 billion) in the Kuntsevsky District Court.

The working group has not yet begun looking into the situation, but the Prosecutor General's Office and the presidential administration's control department recommended that local property service officials and the Northern Administrative District halt their work to fulfill the court-ordered demolitions.

A spokesperson for the Northern Administrative District, where Rechnik is located, declined comment.

Residents are hoping that the president's interference will put an end to the outrage. "The pause that will arise during the working group's actions will be the turning point in this story," one Rechnik resident said. The president's order to deal with each owner individually is a promising sign, another said.

Their group's official representative, Lyudmila Golosova, said it was too early to celebrate, since no one knows what the working group's decision will be.