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VLADIMIR PUTIN reshuffled the Russian cabinet and Kremlin administration yesterday, bringing forward a finance heavyweight and remove a man implicated in corruption during Boris Yeltsin's rule.

The Prime Minister, now acting as president, made his move while Russian forces battled to hold on to two key towns under heavy attack by Chechen rebels, and Moscow admitted for the first time that its forces had suffered major losses. The rebels, having steadily retreated over the past few months, have gone on the offensive in the past week in Grozny and other parts of Chechnya. Russian commanders said their troops had gained the upper hand in Argun and Shali after rebel attacks, …