By Katie Stallard, Russia Correspondent
Russian opposition leader Alexei Navalny has walked free from court after it overturned his five-year prison term on appeal.
The anti-corruption activist was convicted of embezzlement in July, in a case he claimed was politically-motivated and orchestrated on the orders of President Vladimir Putin to silence him.
He was found guilty of stealing 16 million roubles (£312,000) from state timber firm Kirovles while working as an adviser to the regional governor of Kirov, a remote city around 621 miles from Moscow, in 2009.
He was tried alongside Pyotr Ofitserov, a business associate and father-of-five, who refused to turn against Navalny, even at the expense of his own liberty.
Both men were initially jailed, but then released 24 hours later after thousands took to the streets in protest, pending this appeal.
Navalny and his co-defendant Ofitserov were delighted at the verdict Some analysts suggested the release was a tactical ploy by the Kremlin to allow Navalny to participate in last month's mayoral race, legitimising the contest and likely suffering a humiliating defeat.
Instead, he polled an unexpectedly strong 27 per cent, almost forcing the Kremlin-backed incumbent into a run-off.
Ofitserov's wife burst into tears in court as the panel of judges ruled to suspend the sentences, but both men's convictions were upheld, meaning Navalny may now be unable to run for political office until after the next presidential election in 2018.
The 37-year-old has previously said that he would like to run for president and is widely seen as the most credible threat to emerge to Mr Putin's rule.
After hugging his wife and thanking his supporters, he vowed to fight on.
"It's clear for me that the authorities are trying by all means to hound me out of politics, coming up with some restrictions and fabricated cases," he said.
"One thing is for sure, they will not succeed in pushing me and my allies out of political life."
Mr Putin's spokesman denied that he had any influence over the case, telling reporters after the verdict: "It's not a question for the President."
Navalny, a blogger and anti-corruption campaigner, rose to prominence from the mass street protests that preceded Mr Putin's return to power last year.
Denied access to state media, he harnessed the power of social media instead to reach a new generation of young, politically-minded supporters.
In a blog post reacting to the court's decision, he wrote: "It's weird to call this a victory.
"We are so used to the lack of justice that when an innocent man is put in prison we become sad, and when the frightened government gives an innocent man a five year suspended sentence, we are happy and congratulate each other.
"I will not lie - the prospect of writing this blog post and going for lunch, being able to use cutlery, not an aluminium bowl, makes me much happier than the prospect of ending up in the steel coffin of a police van, having my tea and sweets checked, and later preparing to fight a war with mosquitoes in a cell.
"If someone somewhere thinks that from now on I will be scared to participate in any demo or activity that will turn my suspended sentence into a real one, they are mistaken.
"I have always done what I thought was the right thing and I will keep doing it."
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