Russian Economy Minister Aleksey Ulyukayev has been arrest after being accused of taking bribes and extorting companies.

He has been accused of soliciting a $2m (€1.86m) bribe from Rosneft - Russia's largest oil company.

Svetlana Petrenko, deputy head of Russia's Investigative Committee said, "Thanks to the Rosneft representatives’ timely address to law enforcement authorities with a statement about the economy minister’s illegal actions, he was caught red-handed on November 14th this year, while receiving a bribe of US$2m."

Mr Ulyukayev is part of president Vladimir Putin's inner-circle and his ministry has been overseeing the sale of state assets.

PA

He is the highest-ranking Russian official to be arrested since the collapse of the Soviet Union.

If he is found guilty, Mr Ulyukayev faces up to 15 years in prison - and he could be fined up to 70 times the sum of the bribe.

Russia Today reports that a sting operation was carried out after law enforcement agencies obtained information by "wiretapping Ulyukayev’s cell phone."

It also reports that the communications of members of his "entourage" were also monitored and that this investigation began over one year ago.

Kremlin spokesman Dmitry Pesko has stressed that these are serious charges, which will require a high level of evidence to prove that the minister is guilty.

"The president, of course, has been informed [about the arrest] - he is aware of it. He has been informed since the beginning of the investigation," the spokesperson told the Russian media outlet.

Reuters notes that Rosneft's chief executive Igor Sechin is a close ally of Putin - and reports that this could be the fallout from a political struggle resulting from the merger of Rosneft and the Bashneft state-owned oil company last month.

Mr Ulyukayev initially opposed the deal but eventually gave it a green light.