April 3 (Bloomberg) -- OAO Gazprom, which is building a natural-gas pipeline from Russia to Germany, defended itself against charges it had acted improperly by naming former German Chancellor Gerhard Schroeder to head the shareholders' committee for the project.

Schroeder has been criticized by German opposition politicians for agreeing to head the shareholders' committee of the North European Gas Pipeline Co. less than a month after leaving government in November. Schroeder's Economy Ministry approved a guarantee for a 1 billion-euro ($1.2 billion) loan to the Gazprom-led project a month before he stepped down.

Gazprom didn't ask for the loan and doesn't need the money to build the first link of the pipeline, which runs above ground to the Baltic Sea, Gazprom spokesman Sergei Kupriyanov said by telephone today. He declined to specify the cost of the above- ground segment and said the company planned to pay for it out of its own funds.

Schroeder, in an interview with Germany's ZDF television network on April 1, said Gazprom ``won't use'' the loans offered by Deutsche Bank AG and KfW Group.

``As there will be no loan, of course there will also be no government guarantee,'' Schroeder told ZDF.

Calls from the ex-Chancellor's former Green Party allies to quit his post with Gazprom's pipeline venture were reinvigorated after the Berlin-based Economy Ministry confirmed Schroeder's government had issued a loan guarantee for Gazprom.

Former Allies Turn

``Former Chancellor Gerhard Schroeder has unfortunately lost his compass,'' said Claudia Roth, who led the Greens during Schroeder's first term as government leader, in an interview with N24 television. ``He should really give up his post as supervisory board chairman as quickly as possible.''

Schroeder said government loan guarantees are ``proven tools'' used to help promote Germany's economic interests. Still, the government's decision to back the proposed loan wasn't taken by the chancellery, according to Germany's former leader -- a claim dismissed by Roth as ``hardly believable.''

Schroeder won support from German Economy Minister Michael Glos, a member of the Christian Social Union, the Bavarian sister party of Chancellor Angela Merkel's Christian Democrats, and a long-time critic of Schroeder.

``Based on the information I've been given, this has gone according to the rules,'' Glos told reporters in Berlin today.

Biggest gas Exporter

Talks with Schroeder on taking over the pipeline post took place ``after he had finished his political career,'' the company said in an e-mailed statement. ``Gazprom is the world's biggest exporter of gas, a first-class borrower and generally doesn't use state credit guarantees.''

The company held talks with Schroeder about the post of shareholders' committee chairman on Dec. 9, 2005, Gazprom said in the statement. Schroeder, 61, said last week at a press conference in Moscow that he had accepted Gazprom's nomination to the post that same day.

``My acceptance dates exactly from Dec. 9, 2005, and I gave it directly to the Russian president,'' Schroeder told reporters.

Schroeder, who will lead the pipeline venture with Dresdner Bank AG's Russian operations chief, Matthias Warnig, has rejected criticism of his appointment. A Hamburg-based court today upheld a restraining order won by Schroeder against opposition Free Democratic Party leader Guido Westerwelle.

Westerwelle, head of the largest of three opposition parties in the lower house of parliament in Berlin, has frequently called Schroeder's appointment improper. Today's ruling will prevent Westerwelle from making public criticism of the former leader in relation to the pipeline project.

To contact the reporters on this story: Lucian Kim in Moscow at lkim3@bloomberg.net; Andreas Cremer in Berlin at acremer@bloomberg.net.

Last Updated: April 3, 2006 10:33 EDT