By Tom Balmforth and Pavel Polityuk
KYIV (Reuters) -Ukraine sowed confusion on Monday about whether its defence minister would be replaced, creating doubts about the leadership of its war effort just as it braces for an expected Russian offensive.
The questions over Defence Minister Oleksii Reznikov were the first public sign of serious disarray in Ukraine's wartime leadership.
A day after announcing that Reznikov would be sidelined, a top ally of President Volodymyr Zelenskiy appeared to row back, saying no changes would be made this week.
David Arakhamia, chief of the parliamentary bloc of Zelenskiy's party, had said the 37-year-old head of military intelligence, Kyrylo Budanov, would replace Reznikov, who would become minister of strategic industries.
But Zelenskiy remained silent, while Reznikov said on Sunday he had heard nothing.
The confusion caps a two-week crackdown on alleged official wrongdoing, Ukraine's biggest political and administrative shakeup since Russia invaded a year ago.
Central and regional officials were fired or quit, security forces raided a billionaire's home and investigations were launched into suspected fraud at the main oil company and refinery. The Defence Ministry was accused of overpaying for food, although Reznikov was not personally accused of any wrongdoing.
Zelenskiy says he needs to show that Kyiv can be a safe steward of billions of dollars of Western aid. But the moves may risk destabilising a political class that had stood together against Russia's invasion.
Meanwhile, Russian forces have been advancing for the first time in six months in relentless battles in the east. A regional governor said Moscow was pouring in reinforcements for a new offensive that could begin next week.
'EVERYTHING WILL BE RESOLVED'
Ukraine is itself planning a spring offensive, but awaiting delivery of promised longer-range Western missiles and battle tanks.
Some of the West's support has also come in the form of economic sanctions, and there was a sign that these were hitting Russia's foreign revenues just as it raises spending on the war.
The Finance Ministry said vital oil and gas revenues were down 46% from January 2022 because of the discount that Russian crude now trades at on world markets.
While budget revenues for the month were down 35.1%, spending was up 59%, and already more than 10% of the full-year spending plan.
Reznikov, a 56-year-old lawyer, has been the face of Ukraine at international meetings where allies have pledged billions of dollars in arms, and has been warmly received in Western capitals - including Paris just last week.
One obstacle to replacing him with Budanov, a fast-rising officer decorated for operations that remain secret, is a rule requiring the defence minister to be a civilian.
Volodymyr Fesenko at the Penta think tank said he expected Budanov to quit the military, while Reznikov could be given a post of special envoy, making use of his stature abroad.
"Everything will be resolved," Fesenko told Reuters.
Ukraine's defence ministry did not respond to a request for comment and Reuters could not immediately reach Reznikov or Budanov.
In announcing plans for the change, Arakhamia said Ukraine's armed forces should be overseen in wartime by people with a background in defence or security: "War dictates changes in personnel policy," he wrote on the Telegram messaging app.
But Zelenskiy adviser Mykhailo Podolyak said Reznikov had been "extremely efficient in terms of communication with our partners".
He called on national television for an end to the speculation: "The president will make the decision, this decision will then be discussed at various levels... then it will be officially communicated."
Reznikov said on Sunday that any decision was up to Zelenskiy but that he had heard nothing about a transfer. He said he would reject the strategic industry job because he lacked the expertise.
The war is reaching a pivotal point as its first anniversary approaches, with Ukraine no longer making gains as it did in the second half of 2022 and Russia pushing forward with hundreds of thousands of mobilised reserve troops.
Serhiy Haidai, governor of the eastern Luhansk region, said on television that shelling was no longer round-the-clock as Russian forces sent in reserves and equipment to prepare for a full-scale offensive.
"After Feb. 15 we can expect (this offensive) at any time," he said.
Russia said its forces had captured Mykolaivka, a village in the adjoining Donetsk region.
There was no immediate response from Ukraine, which has disputed other Russian battlefield reports.
Russia's main target has been Bakhmut, where its state media said the Wagner mercenary group had gained a foothold.
Wagner chief Yevgeniy Prigozhin, accused by Ukraine of sending thousands of Russian ex-prisoners to their deaths around Bakhmut, released a video purportedly showing him in a tactical bomber that had just struck the town. He said he would fly a fighter on Tuesday and challenged Zelenskiy to an aerial duel.
(Additional reporting by Max Hunder, Ron Popeski, Nick Starkov and Lidia Kelly; Writing by Tom Balmforth, Philippa Fletcher and Kevin Liffey; Editing by Peter Graff and Hugh Lawson)