Ulyukayev, a 60-year-old technocrat whose ministry oversees a politically-charged sale of state assets, is the highest-ranking Russian official to be detained while in office since the collapse of the Soviet Union in 1991.

His case heralded a possible standoff between Rosneft boss and Putin ally Igor Sechin and those in the government who have resisted Rosneft's ambitions to acquire more state assets at a time when low oil prices and Western sanctions are biting.

Such infighting risks triggering potentially destabilising clan infighting in the run-up to a presidential election in 2018 when Putin is widely expected to run for a fourth term.

Ulyukayev, who a Moscow court ruled should be put under house arrest for two months until Jan. 15, faces up to 15 years in jail if found guilty.

Wearing a blue suit, Ulyukayev told a Moscow court he did not accept his guilt. It was in his own interests to cooperate with the investigation as he valued his reputation, he said.