He also declared in his state-of-the-nation address that he will not seek a third term, but refused to suggest a successor and said nothing to quell speculation that he seeks to remain in power behind the scenes.

Putin's second term in office ends in 2008, and he is constitutionally barred from running for a third. While many observers have suggested he would try to stay in office, Putin again dismissed the idea.

"The next state of the nation address will be given by another head of state," he said.

He acknowledged expectations that he would take advantage of his speech to reveal his choice for a successor, then drew a laugh by saying "it is premature for me to declare a political will."