This month is the second anniversary of Russia's invasion of Chechnya, an operation that was supposed to demolish the rebels quickly and re-establish the pride of Russia's armed forces. Instead, it has hastened the disintegration of those forces, already starved of funds, and this week came news that an entire army unit, 74-strong, has deserted its post at a base on the Volga River. The desertion comes as bullying, desertion and "hazing" - the practice of conscripts shooting their officers - reach record levels.

"This just shows what a terrible state the armed forces are now in," says Pavel Felgenhauer, a Moscow defence analyst. "This sort of thing is happening all the time. And it's getting worse. The problem is the triple spiral of moral, ethical and technical degradation of the armed forces."

Put simply, Russia's armed forces are cracking up through lack of cash. In some cases this is literal - many air bases are now useless because their neglected runways have crumbled. Often this hardly matters: 49 out of 115 air bases have no fuel for their planes.

At sea, there is cash to send just two of the 23 ballistic-missile submarines on patrol. The rest rot away, nuclear reactors and all, moored with the rest of the rusting once-mighty fleet.

Fuel is scarce also for its nuclear missiles: US sources say the START 2 nuclear talks have been rendered pointless because Russia has fuel for perhaps half the missiles it is allowed.

And on land, what little money there is for the army is being eaten up in the catastrophe of Chechnya. The rest of the soldiers are left to rot. Conscripts go unpaid for months and officers make ends meet by moonlighting as taxi drivers, security guards and farmers.

Teeth are on edge in the defence ministry as the country prepares for a bout of soul-searching with the imminent lifting of the submarine Kursk, which blew up and sank last year, probably as the result of having her torpedoes filled with cheap but volatile fuel.

Meanwhile, accidents and chaos are spreading through the forces. In recent weeks fires have swept through the main satellite communications centre and set off air-defence rockets in a base outside Moscow. Last week, an S300 missile test-fired in southern Russia went so far off course that it slammed into a village in Kazakhstan, miraculously causing no casualties but triggering fury from that country's government.

To make up for the lack of conscripted cannon fodder for Chechnya, Moscow has deployed units of contract soldiers, paid a premium in exchange for staying on after their conscription has expired. The result has been a new kind of army: one made up of Russia's misfits, flotsam and jetsam. Not since the Black and Tans took the field last century has an army of thugs and criminals been given such freedom of manoeuvre: human-rights groups complain of a tide of murders, rapes and lootings, plus kidnapping and ransom operations run by these so-called contracti.

The problem is simple. Russia continues to field the armed forces of a super power on a defence budget the size of Switzerland's. Earlier this year, President Vladimir Putin ordered Sergei Ivanov, his closest political ally and friend, as well as a former KGB officer, to take over the defence ministry and slash servicemen numbers from 1.2 million to 800,000. Now has come news that he has failed. Just 20,000 are to be cut this year. In fact, a head count has revealed Russia to have 1.35 million people under arms.

Official intransigence is one reason for Ivanov's failure: even a KGB colonel is no match for the massed ranks of generals, admirals and air marshals all keen to protect their fiefdoms. But there is a second problem: the Kremlin's insistence that Russia must maintain a global role. The armed forces are therefore committed to maintaining a nuclear strike force, challenging NATO on land and sea and deploying for a possible war with China as well as that in Chechnya.

The result is disintegration, which is most evident of all in poor Chechnya, where the army is incapable of fielding a force capable of taking on the highly motivated rebels. In May, plans to pull out the bulk of the 80,000-strong force there were shelved indefinitely. "There is no money. These units are basically kids with guns left on their own," says Felgenhauer. "If you want to have a professional force, you have to pay for it."