Vladimir Putin has made a surprise cabinet reshuffle as fighting continues across Ukraine's northeastern border.
The Russian President announced a civilian economist as his new Defence Minister in an attempt to strengthen Russia for economic war.
Putin proposed Andrei Belousov, a 65-year-old former Deputy Prime Minister who specialises in economics, to replace his long-term ally, Sergei Shoigu, 68, as Defence Minister.
A former MI6 intelligence officer told Sky News the move pointed to "serious instability" at the heart of Russian leadership, as Putin's troops launched an incursion in the Kharkiv region, which has seen some 5,762 people evacuated.
Putin announced the cabinet shakeup in the Kremlin
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Former Deputy Prime Minister Andrey Belousov was proposed to take over as Defence Minister
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Shoigu, who has been in charge of defence since 2012 and is a long-standing friend and ally to Putin, will become the secretary of Russia's powerful Security Council, replacing incumbent Nikolai Patrushev, who would get a new, unannounced job.
Kremlin spokesman Dmitry Peskov said the change was because Russia was approaching a situation like the Soviet Union in the mid-1980s, when the military and law enforcement authorities accounted for 7.4 per cent of gross domestic product (GDP).
Former MI6 intelligence officer Christopher Steele told Sky News that Nikolai Patrushev being removed from his role as secretary of the Russian Security Council is "astonishing."
He said: "It's important to understand that he's been one of Putin's closest allies, former head of the FSB and so on for many years...I think what this indicates is not just a reshuffle along normal governmental lines. It's really quite serious instability right in the heart of this regime."
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Sergei Shoigu was removed as Defence Minister
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Russian Security Council Secretary Nikolai Patrushev will move to a yet unannounced job
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Other experts have suggested the shake-up indicates Putin is doubling down on the Ukraine war and wants to harness more of Russia's economy for the war.
The change is likely to be seen as an attempt by Putin to subject defence spending to greater scrutiny to ensure funds are effectively spent after a Shoigu ally and deputy defence minister, Timur Ivanov, was accused by state prosecutors of taking kickbacks worth nearly $11million.
The Kremlin also confirmed that long-standing foreign minister Sergei Lavrov would remain in his post alongside chief of the Federal Security Service (FSB), Alexander Bortnikov and the Foreign Intelligence Service (SVR), Sergei Naryshkin.
Shoigu was heavily criticised by Russian military bloggers for a series of retreats the Russian military was forced to make in 2022.
Leader of the Wagner mercenary group, Yevgeny Prigozhin led an abortive mutiny he hoped would topple Shoigu last year before agreeing to call it off. He was later killed in a plane crash.
Russia's Foreign Minister Sergei Lavrov will remain in post
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It comes as Lavrov was quoted as saying that "if the West wants to fight for Ukraine on the battlefield, Russia is prepared for it."
State-run news agency RIA cited the Foreign Minister as saying: "It's their right - if they want it to be on the battlefield, it will be on the battlefield."
A set of peace talks is set to take place in Switzerland in June, without the participation of Russia.
Lavrov compared the situation to "a reprimand for a schoolchild" whose fate was being decided by teachers while he was out of the room, the agency said.
