Vladimir Nesterov, 63, is leaving the Khrunichev State Research and Production Space Centre, which produces Russia's workhorse Proton rockets, after Prime Minister Dmitry Medvedev harshly criticised the industry.

The failure of part of a Proton rocket caused the multi-million dollar loss of Indonesia's Telkom-3 and Russia's Express-MD2 satellites last week, according to Russia's space agency. Telkom-3 was the first satellite Jakarta had bought from Moscow.

"We are losing our authority and billions of roubles," Medvedev told officials last week. "We cannot stand this any longer."

Hobbled by a decade of crimped budgets and brain drain, Russia's once-pacesetting sector is struggling to restore its former prestige after a string of mishaps, including a failed mission to return samples from the Martian moon Phobos.

Deputy Prime Minister Dmitry Rogozin blamed the failures on ineffective management and a lack of fresh talent joining Roskosmos.

"As long as our youngest director of Roskosmos' manufacturers is 62, Mars rovers will only be a dream and Phobos (spacecraft) will fall to the ground," Rogozin said on Twitter.

Roskosmos head Vladimir Popovkin said talks were tense with Kremlin officials this week.

"We had a very difficult conversation with the prime minister and the president," he told RIA. "All of the criticism addressed at the Russian Federal Space Agency is objective."

Roskosmos will work to establish independent quality controls, he said.

Russia's failure to launch the satellites was caused by a clogged fuel pipe which led to an engine failure in the rocket's upper stage, called the Briz-M, which meant the craft went into the wrong orbit, Popovkin said on Thursday.

The agency had earlier said the Briz-M booster had fired its engines on schedule but they had burned for only seven seconds of the programmed 18 minutes and 5 seconds needed.

The problem was similar to that which led to the loss of a $265-million communications satellite last year.

Such failures for Russia, which conducts 40 percent of global space launches, may undermine its standing in the market, strengthening competitors such as Europe's Ariane rocket.

(Reporting by Alissa de Carbonnel; Editing by Pravin Char)

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