Russian Finance Minister and Deputy Prime Minister Alexei Kudrin resigned Monday after a brief but angry exchange with President Medvedev.

During a meeting of the presidential commission on modernization, Medvedev offered Kudrin chances to tender resignation after the minister on Sunday, while in the U.S., said he would quit the government if it was to be chaired by Dmitry Medvedev after the presidential elections in 2012 because of " principal disagreement" between them over financial issues.

Medvedev called Kudrin's remarks "indecent" and stressed that " discipline and subordination within the government has not been canceled."

"Once you disagree with the course of the president and the government pursue, you have one way out - to tender your resignation," Medvedev, who chaired the meeting in the Volga town of Dimitrovgrad, was quoted by Interfax news agency as saying.

Kudrin then replied he was going to discuss this matter with Prime Minister Vladimir Putin, but Medvedev gave a stronger response.

"You may consult whoever you want, including the prime minister, but as long as I am the president, I will be making such decisions, " the president said, demanding Kudrin to give an answer before Tuesday.

Putin's press secretary Dmitry Peskov said Kudrin, who has earned a reputation as a guarantor of Russia's economic stability in 11 years as finance minister, would keep his post in the government despite the spat.

But soon after the meeting, Medvedev signed the resignation request, presidential spokeswoman Natalya Timakova said. She noted that the resignation letter was not handed by the finance minister but by the prime minister.

The 50-year-old Kudrin has been finance minister since 2000 and during his tenure the Russian government has paid off most of its substantial foreign debt and created oil wealth to soften the blow of the global economic slump.

According to Kudrin, the bone of contention between him and the state leader has been economic policy, primarily concerning high military spending which Medvedev supported. Kudrin insisted the Russia's budget, which is based on the assumption that oil prices would not fall below 100 U.S. dollars per barrel, has been risky as it left the government with no "safety airbag."

For his calls for austerity measures and less populism social policy, Kudrin has earned respect among the center-right wing of Russia's political spectrum.

Immediately upon his resignation, the ousted minister received invitation to join the Right Case party as its leader.

Communist party leader Gennady Zyuganov also welcomed Kudrin's leaving saying the event ought to be celebrated.

Local experts have been convinced that Putin would not let Kudrin go for a long time and might invite him back to the government soon after presidential elections.

Market analysts said Kudrin's resignation might cause a negative response from investors.

Kudrin's direct violation of subordination has been the first such occasion in twelve years, local media recounted. Heated discussions between top state officials used to be frequent during Boris Yeltsin's presidency but faded quickly after Vladimir Putin moved into Kremlin in 2000.