PRESIDENT PUTIN tried to make peace with Russia’s increasingly critical clique of influential businessmen yesterday by ordering his tax police to stop “terrorising” companies.

In his state-of-the-nation address, Mr Putin also called for an amnesty on privatisation deals more than three years old and urged Russians to repatriate the billions of pounds they have stashed offshore.

His speech was seen as an attempt to reassure business leaders two days before a Moscow court delivers its verdict and sentence on Mikhail Khodorkovsky, the Yukos oil tycoon. The pursuit of Mr Khodorkovsky has raised fears that the Kremlin will use tax claims to convict other oligarchs who made fortunes in the privatisations of the 1990s.

Mr Putin, a former KGB officer, described the end of the Soviet Union as the “biggest geopolitical catastrophe of the 20th century” and warned that an “epidemic of collapse” threatened Russia.

But, despite fears of another purge of business leaders, he used his address to rein in tax authorities, who have issued a flurry of huge tax bills in the past year, including one to a company jointly owned by BP.

“Tax authorities have no right to terrorise business,” he said in a 47-minute speech in the Kremlin’s marble hall.

His speech reflected the Kremlin’s concern at an unprecedented wave of criticism over its handling of the Yukos saga, the Beslan school siege, welfare reforms and revolutions in states of the former Soviet Union, such as Ukraine last year and in Georgia in 2003, analysts said.

However, Mr Putin made it clear to critics at home and abroad that he would not tolerate any attempt to harness public discontent to stir revolution. “Russia . . . will decide for itself the pace, terms and conditions of moving towards democracy,” he said.

The business community welcomed his proposals which included an amnesty on offshore funds, believed to total more than £150 billion. But some analysts cautioned that it was not clear whether he would be willing — or able — to implement the proposals.

“It’s the same speech we’ve had for the last six years. It’s a list of topics at the root of the investment instability. The question is whether he’s actually going to do anything,” Chris Weafer, chief strategist at Alfa Bank, said. “The difference is that this year, he’s running out of time. There’s been increasing tension between the state and big business. If he doesn’t address these issues in the second half of the year, things are going to get a lot worse.”

The liberal opposition dismissed Mr Putin’s speech as empty rhetoric designed to ease the West’s concerns that Russia is returning to its totalitarian past. Irina Khakamada, who ran against Mr Putin in last year’s presidential election, said that he had undermined Russian democracy by reasserting the Kremlin’s control over business, media, parliament and government and abolishing direct elections for regional leaders.

The Kremlin argues that it is trying to rebuild the Russian state and end economic chaos.

Mr Putin pointed to a rapidly declining population and ordered the Government to reduce the 100 deaths a day in road accidents and 40,000 a year from alcohol poisoning.

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