* Putin signs decree pardoning Khodorkovsky
* Unclear if former oil tycoon has left prison
* Investors welcome decision, impact limited
* Timing of ex-Yukos boss's release unclear
By Steve Gutterman
MOSCOW, Dec 20 (Reuters) - Russian President Vladimir Putin pardoned one of his best known opponents on Friday, though it remained unclear whether former oil tycoon Mikhail Khodorkovsky had yet walked free after a decade in jail.
Putin surprised Russians and cheered the business community by announcing on Thursday that he would release a man he has long reviled because Khodorkovsky's mother was ill. The move is widely seen as a gesture to critics of his human rights record before Russia hosts the Winter Olympics at Sochi in February.
Khodorkovsky's lawyers said it was not clear when he would leave a prison camp near the Finnish border, 300 km (200 miles) south of the Arctic Circle. Prison authorities did not confirm a report by Interfax news agency which quoted a source in the security services as saying he had already been freed.
A decree signed by Putin and distributed by the Kremlin took immediate effect. Its wording described the decision to pardon the 50-year-old Khodorkovsky, once the richest man in Russia, as having been "guided by the principles of humanity".
Putin had said at the end of a four-hour annual news conference on Thursday that Khodorkovsky asked for clemency. His lawyers said they were checking with their client, who has spent the last few years working in Penal Colony No. 7 at Segezha, an area once part of the Gulag system of labour camps.
The surprise announcement underlined Putin's confidence that he has reasserted his authority and is in full control of Russia after seeing off street protests.
He said two members of the Pussy Riot protest group would also be freed, under an amnesty passed by parliament this week, but it was the about-turn on Khodorkovsky, who was due for release next August, that drew attention.
Khodorkovsky has been in jail since he was arrested in 2003 in what supporters say was part of a Kremlin campaign to punish him for political challenges to Putin, gain control of his oil assets and warn other tycoons to toe the line.
OIL EMPIRE BROKEN UP AND SOLD OFF
The oil baron fell out with Putin before his arrest as the president clipped the wings of wealthy "oligarchs" who had become powerful during the chaotic years of Boris Yeltsin's rule following the collapse of Soviet communism.
His company, Yukos, was broken up and sold off, mainly into state hands, following his arrest at gunpoint on an airport runway in Siberia on fraud and tax evasion charges.
He became a symbol of what investors say is the Kremlin's abuse of the courts for political ends. The Kremlin denies this but Putin has singled Khodorkovsky out for bitter personal attacks and ignored many calls for his release.
Yukos' prize production asset ended up in the hands of state oil company Rosneft, which is now headed by Putin ally Igor Sechin.
Russian shares initially rose after Putin's announcement on Thursday but later settled back.
A sustained rally would require "a consistent track record of implementation of market-friendly reforms - in particular, of steps to improve the judicial system, so that decisions are more predictable and property rights better protected," a Moscow-based economist at an investment bank said.
Putin has staked a great deal of personal prestige on the Winter Games in Sochi, and is under fire abroad over a law banning the spread of "gay propaganda" among minors.
A government source said the pardons would deprive Western critics of a cause: "I think the decision to free Pussy Riot and Khodorkovsky was taken just before the Olympic Games so that they will not be able to wield this banner against Putin."
On a website supporting Khodorkovsky, a man named Igor commented: "It was simply beneficial for Putin to make a show of 'mercy' before the Olympics in order to avoid a huge world scandal."