Russia on Wednesday lifted a criminal conviction for opposition politician Alexei Navalny after a European Court of Human Rights ruling -- but said he must now face a fresh trial.

The ruling concerns the 2013 conviction of the high-profile anti-corruption whistleblower and Kremlin critic and co-accused businessman Pyotr Ofitserov for embezzlement.

After a long-running trial in the central Russian city of Kirov, Navalny received a five-year suspended sentence over a 2009 deal with a state timber company.

The European court ruled in February that the men were deprived of a fair trial and found guilty over "acts indistinguishable from regular commercial activities." 

It told Russia to pay damages of 8,000 euros ($8,600) to each defendant and cover legal costs.

In Wednesday's decision, Russia's Supreme Court overthrew the men's convictions but sent their case back for retrial.

Navalny had hoped that the court would simply close the case and reacted with frustration at the ruling.

The Supreme Court "practically refused to fulfill the ECHR decision. They did not close the case but sent it back for a new hearing," he wrote on Twitter.

He said the ruling was made "so I can't take part in politics and do my investigations," although lawyers said he is now eligible to stand in elections.

His lawyer Vadim Kobzev told AFP: "The meaning of today's decision is that there will be a repeat trial, everything will start again from a court in Kirov."

Navalny now is "formally not convicted over this case," Kobzev confirmed, although he has another conviction in an embezzlement case involving French cosmetics company Yves Rocher.

Navalny was the star speaker at mass protests in 2011 and 2012 over President Vladimir Putin's return to the Kremlin and came second in Moscow's mayor race in 2013.

But he has been targeted in a number of legal probes and spent months under house arrest.

The conviction related to the state timber company has forced Navalny to step back from politics but he nonetheless publishes widely-viewed reports exposing and ridiculing the secret luxurious lifestyles of top Russian officials. 

Kobzev said Navalny's legal team is "not satisfied" with the Supreme Court's decision, which he attributed to the absence of clear procedures on European rulings.

There is now a possibility that "in a new trial, they will be cleared," he said. 

"If they convict them again and find them guilty, this will be ignoring the European Court of Human Rights."

Russia in 2015 passed a law that allows it to reject decisions made by international rights courts, allowing it to snub the European Court of Human Rights.

Source: AFP