UPDATE 2-Kazakh opposition leader jailed after oil town unrest

* Vladimir Kozlov jailed for seven-and-a-half years

* Judge links defendant with billionaire fugitive Ablyazov

* Oil town riots prompted crackdown on Kazakh opposition

(Adds foreign ministry reaction)

By Dmitry Solovyov

AKTAU, Kazakhstan, Oct 8 (Reuters) - An outspoken critic of Kazakhstan's president was jailed for seven-and-a-half years on Monday for colluding with a fugitive billionaire in a failed attempt to rally oil workers to bring down the government.

Vladimir Kozlov, leader of the unofficial Alga! party, was found guilty of orchestrating dissent among striking oilmen in the prelude to riots last December that killed 15 people and dented Kazakhstan's reputation for stability.

Kozlov denied the charges. In his final pronouncement before sentencing, he said on Oct. 1 that his case was an "undisguised attempt" to stifle civic protest and labour rights in the former Soviet republic.

In more than two decades as president, Nursultan Nazarbayev, 72, has eschewed democratic freedoms in pursuit of the oil-fuelled growth and investment that has made Kazakhstan's $185 billion economy the largest in Central Asia.

Authorities have tried in recent years to balance their desire to preserve stability and economic growth with efforts to improve the Kazakh image on the world stage.

The United States has said Kozlov's case would be a test for the democratic credentials pledged by Kazakhstan when it chaired the Organisation for Security and Cooperation in Europe in 2010.

Kozlov, 52, clenched his fists when the judge read out his sentence in front of several dozen supporters in a court in Aktau, a city 2,600 km (1,625 miles) west of the capital Astana.

Aktau is the capital of Mangistau, the western Kazakh region where employees of state-run oil companies staged a months-long protest in 2011 after being fired for striking over wages.

On Dec. 16, a riot erupted in the main square of Zhanaozen. Police opened fire and at least 14 people were killed. Another person died when rioting spread next day to a nearby village.

Judge Berdybek Myrzabekov said Kozlov had turned a labour dispute into a politicised strike after travelling the country to find "weak spots" under orders from Mukhtar Ablyazov, an arch foe of Nazarbayev and the former head of BTA bank .

Ablyazov left Kazakhstan in 2009 and was granted political asylum in Britain last year as he awaited fraud charges he says were politically motivated. His whereabouts are unknown since he fled London in February after being sentenced there for contempt of court.


Back home, Kazakhstan's marginalised opposition enjoys little popular support. Despite never having held an election judged fair by international monitors, Nazarbayev is praised for presiding over stability relative to neighbouring states.

But authorities have grown more wary of dissent after street protests in Russia, which shares a language favoured by millions of its citizens and remains Kazakhstan's biggest trade partner.

In an interview with pro-government Russian television on Sunday, Nazarbayev said "people with bad intentions" had exploited a simple labour dispute for their own criminal ends.

"The puppeteers were far away. They weren't even there, but directed everything that went on," he told Russia's Channel One.

Many of Kozlov's supporters chanted "Shame!" as the seven-week trial ended. As he was being led away, Kozlov grabbed a wooden barrier for support and said: "This is not a proper trial, but persecution. What has just happened here is a crime."

His political associate Mikhail Sizov called the sentence "outrageous" and said he would fight for Kozlov's release.

Kazakhstan's government rejected opposition claims the case was politically motivated.

"Court proceedings were conducted in an open manner and absolutely everybody was able to participate," Foreign Ministry spokesman Altay Abibullayev said. "Such practices are not widespread even in many countries with developed democracies."

Kozlov was arrested in January, a week after Kazakhstan held a parliamentary election in which his Alga! party, long denied official registration, was not eligible to stand.

The election admitted three parties to parliament for the first time, a small concession to democracy. But the second- and third-placed parties are broadly sympathetic to the ruling party and OSCE vote observers said genuine opposition had been barred.

Several opposition activists and two defence lawyers missed the sentencing because their flight from Almaty was delayed, a problem attributed by the airline to a fault with their plane.

Kozlov's two co-defendants, opposition activists Serik Sapargaly and Akzhanat Aminov, walked free after being handed suspended sentences. Aminov had pleaded guilty.

(Writing by Robin Paxton; Editing by Mark Heinrich and Diana Abdallah)

((robin.paxton@thomsonreuters.com)(+7 7272 508 500)(Reuters Messaging: robin.paxton.thomsonreuters.com@reuters.net))