Privatization chief Vladimir Polevanov, criticized by President Boris Yeltsin for "inept statements" about privatization, defended plans Thursday to nationalize some firms, Interfax said.


Interfax quoted informed sources as saying Polevanov had told Yeltsin about "the need to nationalize the fuel sector and aluminum industry."


Polevanov frightened Western investors with comments late last year and early this year that firms in the two sectors could be nationalized. RIA news agency said Wednesday that Yeltsin had admonished him for the comments.


Interfax said Polevanov had also written to Prime Minister Viktor Chernomyrdin, saying Russia should "refrain from forcing through the second phase of privatization."


One proposal Interfax said Polevanov had made to Chernomyrdin was that a commission should be set up to "analyze and make good the miscalculations which occurred in strategic industries, especially defense, space, aviation and maritime ports."


Polevanov shocked foreign investors this month when he barred Western advisers and their Russian employees from entering his ministry to protect national secrets.


Yeltsin and Chernomyrdin, apparently trying to allay investor fears, issued a statement Tuesday reaffirming a commitment to privatization.


Interfax quoted government sources as saying Polevanov, appointed privatization chief Nov. 15 last year, met Prime Minister Viktor Chernomyrdin on Monday. It said Chernomyrdin had suggested that Polevanov should resign as head of privatization but remain a member of the government.


Interfax said Thursday that Russian parliamentary experts were working on a new draft law defining which Russian property can be nationalized. The law will also indicate where former owners can get compensation for losses incurred due to nationalization, Interfax said.