Russia's struggle to confront one of the most controversial episodes of its Communist past took a fresh twist yesterday after prosecutors rejected an application to formally exonerate Nicholas II, the country's last czar.

The refusal to issue an official rehabilitation decree for the czar and his family, executed by a Bolshevik firing squad in 1918, comes after a two-month investigation by prosecutors who said they did not find evidence that the killings were officially ordered.

The decision sparked outrage among Russian royalists and surviving members of the Romanov family. Grand Duchess Maria Vladimirovna, who heads one of the dynasty's senior branches, vowed to continue her campaign in the Russian courts.

More than four million Russians who were jailed or executed for political reasons during Soviet times have been cleared in recent decades -- a process formally known as rehabilitation.

But under Russian law, rehabilitation can only come if it can be shown that the victim either stood trial or was executed on the orders of Soviet authorities.

Historians are divided as to whether the czarist executions were carried out solely, and therefore illegally, on the orders of the Ural Regional Soviet, or whether they were sanctioned by Lenin and the Soviet Central Executive Committee.

The prosecutor's office appears to have concluded that the family was murdered, rather than the victims of politically motivated execution, and therefore cannot be rehabilitated.

Since the fall of the Soviet Union, Russia has engaged in intense soul searching over the deaths of the czar's family. In 1998, Nicholas, his wife and three of their five children were exhumed and reburied in St. Petersburg.

Former president Boris Yeltsin attended the funeral, and described the executions as "one of the most shameful pages in our history."

But royalists say those words were not enough and a legal directive is necessary if Russia is to lay to rest the demons of its past.

"We believe that this rehabilitation is necessary for the Russian state itself to show the world that it has denounced the crimes of the Soviet era, not just in words, but also in deeds," said Alexander Zakatov, a representative of the Grand Duchess.

The Orthodox Church, which has canonized the czar and his family, has said official rehabilitation is unnecessary given that the victims are now regarded as saints.