Russian protest leader Alexei Navalny on Wednesday escaped being sent to jail in a controversial embezzlement case after a court converted his five-year penal colony sentence into a suspended term.
The appeal verdict meant that Navalny walked free from court although his fraud conviction, which disqualifies him from politics and his supporters say was ordered by the Kremlin, remains in place.
The three judges hearing the appeal at the regional court in the northern Kirov region said in a verdict they had ruled to "change the verdict for Alexei Navalny into a suspended term."
The dramatic ruling came after President Vladimir Putin's most vehement critic made a surprisingly robust showing in a key Moscow election in September.
"It is all absolutely obvious that all the decisions, first on the real sentence and the change now to suspended, are taken definitely not here but personally by Vladimir Putin," Navalny said after the ruling.
"I have not the faintest idea what is going on in his head, why he changes his decision."
The suspended sentence still bars Navalny -- who has openly declared presidential ambitions -- from standing for office in the foreseeable future.
"The authorities are trying with all their strength to in any case push me out of the political battle," he said. "It is absolutely clear they will not manage to push out me and my colleagues from this political fight. We will continue."
Navalny, who also faces several other criminal probes, said he would appeal the conviction. "Naturally, we will appeal," he told reporters in the courtroom.
Navalny's co-accused Pyotr Ofitserov, who was previously sentenced to four years in a penal colony, also received a suspended sentence.
Wednesday's hearing was uncharacteristically swift, with Navalny saying he saw no sense in participating in debates.
Wearing his trademark uniform of tie-less shirt with sleeves rolled up, Navalny sat on the defendants' bench typing into an Apple laptop with a "Putin - thief" sticker on the back.
The charismatic 37-year-old lawyer Navalny won 27% in Moscow mayoral polls last month, a surprisingly strong result that put him in second place behind pro-Kremlin incumbent Sergei Sobyanin.
His populist campaign played on anti-migrant moods and weariness with widespread corruption under Putin.
In July, Kirov's Lenin district court found Navalny and his business associate Ofitserov guilty of embezzlement over a 2009 timber deal and they were immediately arrested.
But in a surprise decision, Kirov's regional court freed them the next day, arguing they should remain free pending their appeal. The unprecedented move allowed Navalny to run for Moscow mayor.
Navalny rose to political stardom at mass protests in the winter of 2011- 2012 against Putin's return to the Kremlin for a third term.
Independent pollsters Levada this month found that 51% of Russians had heard of Navalny, taking him far beyond his initial audience of Internet-savvy middle class Russian in Moscow.
Navalny told the Moskovsky Komsomolets daily on Monday that he thought it was unlikely he would be jailed immediately.
"You can't rule it out, but it is all the same an unlikely scenario," he said.
But he had revealed that he would be taking a bag packed with prison essentials such as trainers with Velcro fasteners into court.