Russia's giant Yukos Oil Company has proposed stripping its chief shareholders of control of the firm and paying off tax liabilities to the government in a last-minute bid to settle a multibillion-dollar tax case without bankruptcy.

A series of proposed concessions, contained in a letter sent last week to Prime Minister Mikhail Fradkov, were made shortly before the imprisoned former chief executive Mikhail Khodorkovsky returns to court Wednesday. While Fradkov apparently did not accept the deal, the terms outlined by Yukos indicated that it acknowledges the government will not allow Khodorkovsky and his partners to keep their controlling stake. The developments sent the Russian stock market to its lowest point of the year and pushed Yukos shares down 8 percent for a loss of about 60 percent since masked Russian agents stormed Khodorkovsky's plane and arrested him at gunpoint in October.

"It was a last-minute try to say we are willing to try to do whatever is possible to avoid the bankruptcy of Yukos," said a senior company executive, requesting anonymity because of the sensitivity of the discussions. But the government, he added, expressed no interest in negotiating an end to the conflict.

Khodorkovsky, who built Yukos into Russia's most successful private company and amassed a $15 billion fortune that made him the country's richest man, heads to a Moscow courtroom Wednesday morning for preliminary hearings intended to set rules and a date for his trial on tax evasion and fraud charges.

Lawyers for Khodorkovsky said they will ask for a delay to prepare for combining his case with that of his billionaire partner, Platon Lebedev, who has been in jail since last summer. The trial will be heard by a three-judge panel because the charges do not qualify for a jury trial under Russian law. Officials have promised a fair and open trial, but so far the proceedings have mostly been closed. Even if the trial is open, court officials said only a few seats would be available to hundreds of journalists and interested spectators.

"We don't have high expectations for a fair trial," said Sanford M. Saunders Jr., a Washington attorney who has flown here to help the Khodorkovsky legal team. "He wants a fair and open trial. He's never shown any fear about taking his shot if he can get a fair and open trial. Now unfortunately nobody can tell him he can expect that."

The case is seen by Russia's political and business sectors as a showdown between Khodorkovsky and President Vladimir Putin. While many top businessmen have been accused of shady dealings during the chaotic transition to capitalism in the 1990s, Khodorkovsky was singled out for arrest after he tried to use his fortune to build influence in parliament and challenge Putin's monopoly on power.

The government has jailed Khodorkovsky and his associates on criminal charges stemming in part from a 10-year-old privatization deal, while reopening completed tax audits of his company and recalculating its liability under a different interpretation of tax shelter law. The government has assessed the company $3.4 billion in back taxes, penalty and interest for 2000, and Yukos executives anticipate that the total bill could reach $8 billion to $10 billion once the auditors recalculate subsequent tax years.

Increasingly, some analysts have concluded that the government will not settle for anything less than Khodorkovsky's ouster from Yukos and possibly the takeover or breakup of the company. Gazprom, the state-controlled natural gas monopoly, has been exploring the creation of its own oil company, and a Gazprom executive recently suggested it would like to buy up Yukos assets if they were put on the market.

The Yukos team has lost in nearly every Russian court hearing various aspects of the case. Last week a judge deemed too sympathetic to Yukos was removed from the case. The only courts to side with the company were in Switzerland, where two rulings in the last few days ordered the government to release $4.6 billion in Yukos-affiliated accounts that had been frozen at Moscow's request.

Yukos executives have said they believe it is almost certain they will lose the tax case, a conclusion that prompted the proposal to Fradkov. The letter by Yukos chief executive Simon Kukes -- first reported by the Financial Times and Vedomosti, a Russian newspaper, and confirmed by company executives -- agreed to the full back taxes if the government would allow installment payments and unfreeze Yukos assets in Russia.

Among the options outlined in the letter, according to company executives, would be a new issue of Yukos stock, either to raise cash to pay the tax debt or to give directly to the government or state banks. Such an issue would dilute the shares of current owners. A Yukos source quoted by Vedomosti suggested that under this plan, Khodorkovsky and his partners would see their share in the company reduced to under 25 percent.

Khodorkovsky's partners and spokesmen did not comment about whether they had signed off on the plan. Fradkov's office and the federal tax service would not discuss the issue, however Russian media quoted government sources dismissing the plan.