Baluyevsky was conspicuously absent from a recent summit between top U.S. and Russian officials to discuss defense issues.
Although Russia's military has since denied that Baluyevsky offered to step down, observers say the move, if true, could signal a growing conflict between rival forces within the country's defense structures.
When Defense Minister Serdyukov offered to resign in September after his father-in-law, Viktor Zubkov, was named prime minister in a cabinet reshuffle, Baluyevsky was at pains to disguise his satisfaction. The chief of the General Staff allegedly told reporters that in the wake of Serdyukov, even a woman could lead the Defense Ministry -- a comment seen as a grave insult to the minister.
But President Vladimir Putin said he saw no conflict of interest and told Serdyukov to keep up his work at the ministry. Putin had installed Serdyukov, who previously led the Tax Ministry, in order to clamp down on rampant corruption and misspending in the armed forces.
Serdyukov, a former furniture salesman, and Baluyevsky, a career soldier, rarely if ever saw eye to eye.
Their troubles appear to have arisen because there is no clear delineation between the functions of the General Staff and the Defense Ministry, according to Aleksandr Golts, a defense expert and editor of the online newspaper "Yezhednevny zhurnal."
"The point is that Russia has rather an exotic defense structure in comparison to other modern states," Golts says. "The General Staff works out strategic planning at the same time as dealing with deployment issues, which is something that Western countries, and particularly the United States, stopped doing a long time ago. It's dangerous if you are both planning and carrying out your [military] plans -- it makes for the militarization of politics in a country."
As defense minister, Serdyukov's task has been to bring urgently needed reforms to the country's sprawling armed forces -- a hangover from the Soviet era. His suggestions have been drastic -- selling off military land, privatizing naval and aviation repair yards, and outsourcing medical services. That has riled many of the country's top generals, says Golts.
"In practical terms, it means the following: as soon as the Defense Ministry sets in motion changes that encroach on the interests of one or other military clan, because of this institutionalized contradiction, the slighted parties will complain to the chief of the General Staff," Golts says. "Serdyukov has put forward some suggestions that have shaken the higher echelons of the General Staff."
For Pavel Felgenhauer, the defense correspondent for the newspaper "Novaya gazeta," Baluyevsky's alleged resignation plans are a sign of the clash between army traditionalists, such as Baluyevsky, and reformers, such as Serdyukov. But, Felgenhauer says, when spending on the armed forces has risen from $5 billion in 2000 to $40 billion this year with little sign of improvement, a radical overhaul like the one Serdyukov has proposed is essential.
"The results [of the rise in funding] are meager, if not zero: no new weapons procured, salaries low, widespread discontent," Felgenhauer says. "This corruption is real. I don't know whether the reforms that Serdyukov is trying to introduce will really make things better, but things as they are now are intolerable, and that's why Putin actually appointed Serdyukov, with the task of cleaning up."
Baluyevsky has been a close ally of outgoing President Putin, supporting his opposition to a proposed U.S. missile-defense shield to be built in Central Europe. And, like Putin, he likes to indulge in Cold War rhetoric. Earlier this year, he warned that Russia was ready to use force -- including preemptively and with nuclear weapons -- to defend itself against potential threats from what he called "international terrorism or countries seeking global or regional hegemony."
Earlier this month, Baluyevsky was missing from a key summit on defense issues between Russian and U.S. top brass. His absence -- officially because he was on holiday -- was seen as a sign he was soon to be replaced.
The Defense Ministry took the unusual step on March 26 of denying as "false" media reports on Baluyevsky's intention to resign.
But observers are unconvinced, saying either Putin -- or Dmitry Medvedev, after his inauguration on May 7 -- will ultimately accept the general's offer. Then, Golts says, the real question will be whether his successor can reach a compromise with the Defense Ministry.
"For me the important question -- and it's one to which I don't have the answer -- is whether there can be any sort of advances made in an army that hasn't undergone reforms, which is what Serdyukov is trying to do," Golts says. "It's like trying to put an engine into a cattle cart -- you just can't transform it into a car."