KIEV, Dec. 11 – Prime Minister Yulia Tymoshenko’s group on Thursday nominated Andriy Portnov, a harsh critic of President Viktor Yushchenko, to be in charge of selling state assets.

The nomination suggests Tymoshenko is heading for a confrontation with Yushchenko in a development that may undermine the fragile support for the coalition that is being created.

“We are categorically against the nomination of Portnov as the chairman of the State Property Fund,” Ksenia Liapina, a member of Our Ukraine, Yushchenko’s party, said Thursday. “The nomination of [Portnov] to the position is a provocation by the Tymoshenko group.”

Portnov, one of Tymoshenko’s top lawyers, has been very critical of Yushchenko, on several occasions making extremely rude statements in respect of the president.

Portnov is thought to be an ally of Viktor Medvedchuk, once powerful chief of staff at the office of then-President Leonid Kuchma and Yushchenko’s biggest foe. Medvedchuk is believed to have organized massive election fraud in 2004 to try to prevent election of Yushchenko to the presidency.

Medvedchuk repeatedly denied any involvement in any illegal activity. No charges have been ever filed against Medvedchuk.

The fraud triggered the Orange Revolution that had eventually catapulted Yushchenko to the presidency.

Tymoshenko seeks to appoint a loyal person to be in charge of the SPF as the government seeks to raise more money for the budget as financial crisis has been deepening.

Portnov is thought to be one of the strongest privatization lawyers in Ukraine and his nomination to the post raises fears in the business community that his talents may be used by Tymoshenko to reverse privatization of some companies.

“He is a big specialist in legal issues,” Andriy Kozhemiakin, a trusted Tymoshenko lieutenant, said Thursday.

Tymoshenko, during her first tenure as the prime minister between February 2005 and September 2005, pledged to revisit privatization of some 3,000 companies throughout Ukraine. She has denounced the plans ever since and has been quiet on the issue since being appointed to the post of prime minister in December 2007.

Tymoshenko said her group has Tuesday created a new coalition, involving Our Ukraine-People’s Self-defense and the group led by Parliamentary Speaker Volodymyr Lytvyn.

The new coalition currently numbers 214 lawmakers, less than 226 lawmakers that are required for approval of legislation.

Portnov may get overwhelming support from the Communist Party, a small but vehemently pro-Russian group, and get the job of the chairman at the SPF when the lawmakers agree to debate the issue, analysts said.

The Communists helped Tymoshenko to appoint Lytvyn as the new speaker of Parliament on Tuesday.

This is the second time that Portnov is nominated to the post. The same nomination six months ago was never backed by Our Ukraine-People’s Self-defense and led to a major clash between Tymoshenko and Yushchenko.

Tymoshenko is Yushchenko’s biggest rival that plans to participate at the next presidential election that is due either late 2009 or early 2010.

The government said earlier this year that it will be using cash from state reserves to create a special stabilization agency that would help to recapitalize commercial banks and other issues. (tl/ez)