By Thomas Grove
MOSCOW (Reuters) - Russian prosecutors called on Tuesday for Kremlin critic and protest leader Alexei Navalny be jailed for 10 years as they appealed against a suspended sentence he received last year in a theft case, arguing it was 'too soft'.
Navalny and his brother Oleg were convicted last year of stealing 30 million roubles - nearly $500,000 (324,923 pounds) at the current exchange rate - from two firms, including an affiliate of the French cosmetics company Yves Rocher.
Both were given 3-1/2-year jail sentences. Oleg is serving his time in jail, while Navalny, who led street protests against Vladimir Putin in 2011-12, was given a suspended sentence.
"We demand that Navalny be sentenced to 10 years in jail," state news agency RIA quoted a prosecutor as saying at the appeal at Moscow city court.
The Navalny brothers were found guilty of defrauding companies by overcharging them for mail and parcel services provided by their business from 2008 to 2011.
Oleg allegedly used his position as a senior manager in Russia's Post Office to attract customers for his mail company, of which investigators said Navalny was registered as the founder.
Other Russian news agencies cited the prosecutor's statement as saying that Navalny's suspended sentence was "excessively soft" and that the brothers had to be isolated from society.
Although Navalny, who also campaigns against corruption, has little chance of mounting a serious challenge to Putin, he has promised to lead 100,000 people on March 1 in protest against policies he says are leading Russia deeper into economic crisis.
After the brothers were sentenced on Dec. 30 last year, Navalny said Putin's "regime" had to be destroyed. Hours later, he violated the terms of his detention by cutting off his house arrest tag to attend a rally of supporters who had gathered near the Kremlin to protest his trial.
At the Moscow city court, Navalny, who says the case against him is an attempt by the Kremlin to stifle dissent, said prosecutors' demands were "not based on the law and are not worth reviewing", Interfax news agency reported.
The U.S. State Department called last year's sentencing a disturbing development "designed to further punish and deter political activism".
Putin's popularity ratings have soared since the annexation of Ukraine's Crimea territory and what Russians see as the leaders' tough stance against the West over eastern Ukraine.
But Navalny, who dubbed his March 1 protest an "anti-crisis" rally, hopes to tap anger over a faltering economy expected to contract this year in the face of falling oil prices and Western sanctions.