Russian gas giant Gazprom will retain PricewaterhouseCoopers as its auditor although the accounting firm has been accused of covering up alleged asset-stripping by the company, the gas company said in a statement on Friday.

Both companies deny reports of a cover-up.

The decision was made by Gazprom's tenders committee, but must still be ratified by the board and a shareholders' meeting, which is to convene next month.

PwC was the firm best suited to audit Gazprom, said its tenders committee, which put KPMG in second position.

Hermitage Capital, a top foreign investment fund in Russia and a minority shareholder in Gazprom, last month lodged several lawsuits with the Moscow Arbitration Court, alleging that PwC's audits of the state-controlled gas giant were "deliberately false."

The fund also applied to the finance ministry to suspend PwC's audit license in Russia and bar it in the future from auditing Gazprom, the world's largest gas producer.

It said the alleged covering up was "Russia's Enron."

PwC dismissed Hermitage Capital's claims as "completely unfounded" and vowed to seek damages in court.

PwC has audited and approved in recent years the annual accounts at Gazprom, the largest Russian company which holds a quarter of the world's estimated gas reserves, but seen until recently as one of the country's worst-managed.

Gazprom minority shareholders accuse the accounting powerhouse of deliberately overlooking several suspect deals conducted between the gas monopoly and its subsidiaries.

The minority shareholders are especially concerned about a deal in which Gazprom sold a stake in the Purgaz gas-producing subsidiary to the company Itera for 1,200 dollars (1,364 euros).

Analysts estimate the 32-percent stake in Purgaz was worth more than 400 million dollars (455 million euros).

Some Russian media have accused Gazprom officials of setting up Itera as a shell company in which they hid profits from other shareholders, including the state.

Gazprom directors deny the charges.

With acknowledgements to Sapa and AFP.