The auction of Yukos' major production unit Yuganskneftegaz will go ahead as scheduled despite a US court ruling imposing a temporary injunction to block the sale, an official with the Russian Federal Property Fund said Friday.

"We are a specialized state agency and act according to Russian law," Alexander Komarov said, adding that the sale would be held on Sunday as planned, the Itar-Tass news agency reported.

"We follow decisions made to this day by Russian authorities," he stressed.

Russia's gas giant Gazprom confirmed on Friday that it would not withdraw from the auction this weekend despite the American court ruling suspending transactions with Yukos assets, Interfax news agency reported.

"Nobody has canceled the decision of our founding firm, Gazprom, and we will take part in the auction," Gazpromneft press secretary Alexander Stepanenko was cited as saying.

State-controlled Gazprom has been expected to win Sunday's government auction of Yuganskneftegaz, which would signal the end of Yukos as one of the world's top oil companies and its takeover by the state after a bruising 18-month judicial battle.

Russian tax authorities are demanding over 27.5 billion US dollars as back taxes including fines and penalties from Yukos for2000-2003.

Yukos filed for voluntary bankruptcy on Wednesday in a US district court in Houston, Texas, and appealed for an injunction to block the auction of Yuganskneftegaz, which produces some 60 percent of Yukos output.

The US court on late Thursday ordered a 10-day halt to the planned sale of Yuganskneftegaz and the embattled Russian oil giant may use the period to seek permanent injunction.

A high-ranking official with the Moscow court which handles the Yukos cases said Thursday prior to the US court ruling that Yukos'filing for bankruptcy protection will have no legal consequence in Russia.

Market analysts believe that the US court ruling may influence not an auction, but a decision by foreign investment banks to extend credit to Gazprom for the bid.

A consortium of international banks has reportedly put on hold plans to lend Gazprom 13 billion dollars, part of which will be used for bidding for Yuganskneftegaz, The Moscow Times reported on Friday.

The US court injunction against the sale would be easier to enforce on banks with assets in the United States than on the Russian government, which could argue protection from asset seizures under sovereign immunity, the news daily cited lawyers assaying.

The court order would not only jeopardize financing for the bid and further tarnish the government's reputation, but would also open the way for seizures of Gazprom's oil and gas exports after they leave Russia if it buys Yuganskneftegaz in contempt of a US court decision, according to the newspaper.

Many critics see the judicial investigation of Yukos as a Kremlin-inspired onslaught against the oil giant, which had sponsored political opponents against Russian President Vladimir Putin.

The Russian leadership denies the allegation, saying that the case was part of the country's anti-corruption campaign.

(Xinhua News Agency December 18, 2004)