In a major signal of the Russian government's commitment to continue economic reform, President Boris Yeltsin fired Russia's controversial privatization boss Tuesday, eliminating a major threat to the country's crucial privatization program.


Yeltsin signed a decree dismissing Vladimir Polevanov from his post as the chairman of the State Property Committee, a position he only took up in November, according to a statement from the presidential press office.


No official information was available Tuesday on who would replace Polevanov as privatization boss, but Interfax reported that Russia's top official dealing with bankruptcy, Sergei Belyayev, was likely to take the office.


The controversial privatization chief, who suggested renationalizing oil and metals companies, had shaken investors' confidence in Russia's sell-off program and raised questions about the general course of reform.


The news of Polevanov's dismissal came as a top-level International Monetary Fund delegation is in Moscow negotiating a crucial $6.4 billion standby loan to Russia which is linked to continuation of the country's economic reform program.


Players on Russia's financial markets immediately welcomed Yeltsin's decision, saying it would help markets recover. "This is one of the important steps in bringing the investors back," Boris Jordan, director of investment banking at CS First Boston, told Reuters.


The privatization chief appeared on the verge of losing his job last week, when First Deputy Prime Minister Anatoly Chubais said there was "no place for Polevanov at the State Property Committee." Yeltsin himself had slapped down his privatization boss earlier this month for making "inept statements."


Polevanov was appointed deputy head of the presidential control department, whose primary purpose is inspecting Russia's regions, the statement from the presidential press office said.


Polevanov, formerly a little-known official from the Amur region, first stunned investors last month when he suggested renationalization of "wrong-ly" privatized metals and oil companies and described foreign investment as a "threat to national security."


In January, Polevanov barred foreigners as well as several press officers from entering the State Property Committee's headquarters in Moscow, purportedly to protect state interests.


To stem concern, Yeltsin and Chubais declared that the country's move to a market economy would not change.


According to stockbrokers, however, Polevanov's anti-market moves deepened the decline in Russia's equity markets, where foreign investment shrank tenfold from $500 million a month in August to less than $50 million in December, as investors were driven away by economic and political uncertainty in the country.


Dmitry Vasilyev, a former deputy chairman of the State Property Committee who now serves at the government's Securities Commission, suggested Tuesday that Polevanov's dismissal would help Russia's stock markets recover.


"The Polevanov factor will soon stop affecting stock markets," he said hours before the dismissal was announced.


Polevanov's brief, controversial tenure at the State Property Committee highlighted a confrontation between Russian officials over the pace of reform and its key element, privatization.


Senior State Duma officials this week gave their support to Polevanov, saying many of his ideas were right.


Sergei Burkov, head of the Duma's Privatization Committee, said he supported Polevanov's proposal to "correct the mistakes of the first stage of privatization."


The statement indicates that the government's privatization-for-cash program, launched by a presidential decree in July after it was rejected by the Duma, is still under threat.


No legislation to implement the decree has been passed.


A commission was set up this month to finalize the government program, taking into account amendments proposed by deputies.


It was not clear whether any radical changes to the program would be made.


However, Burkov has already proposed postponing the sale of the government's stake in oil companies, which is expected to bring state coffers over 5 trillion rubles ($1.25 billion) under the draft 1995 budget.


In a Polevanov-style comment, Burkov said the transfer would be a fire sale of a strategic national industry to foreigners.