President Vladimir Putin today froze Russia's compliance with the 1990 Conventional Forces in Europe (CFE) treaty, one of the key agreements that helped end the Cold War stand-off between Nato and the Soviet bloc.

The precise consequences of the move were unclear, but it appeared to confirm a growing assertiveness from the Russian leader, who has caused widespread concern in the West with his willingness to use Russia's vast energy reserves as a political tool.

Mr Putin announced the moratorium in his annual state of the nation address to parliament and also confirmed that it would be his last such speech. He dismissed speculation that he would engineer a constitutional amendment to allow him a third term in office but drew a laugh from deputies by saying: "It is premature for me to declare a political will."

Mr Putin linked the decision to step back from the CFE treaty with a US plan to station elements of a missile shield in Poland and the Czech Republic, two former Soviet states that have now joined Nato.

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He said that the Nato alliance was "building up military bases on our borders and, more than that, they are also planning to station elements of anti-missile defence systems in Poland and the Czech Republic".

“In this connection, I consider it expedient to declare a moratorium on Russia’s implementation of this treaty -- in any case, until all countries of the world have ratified and started to strictly implement it,” Mr Putin said in his annual address to both houses of the Russian parliament.

The CFE treaty, signed in 1990 between Nato and the Warsaw Pact, allowed the destruction of 60,000 tanks, vehicles, artillery pieces, planes and helicopters. Under it, the number of armed forces was also reduced from 5.7 million troops to fewer than three million, and inspections and transparency were reinforced.

But Mr Putin pointed out that an adapted treaty, signed in 1999 in Istanbul, has been ratified by only four countries however, including Russia.

The President's speech was delayed by the death and funeral of Mr Putin's predecessor, Boris Yeltsin, who was buried yesterday on what was declared a day of national mourning.

Mr Yeltsin's send-off reflected the ambivalence most Russians feel about his legacy - he is widely seen as the man who killed off the Soviet Union only to replace it with free-market economic chaos.

Under Mr Putin, whose second four-year term ends next year, the Russian economy has boomed, largely on the back of increased oil exports and soaring energy prices.

Mr Putin proposed today that part of the country's accumulated oil wealth - held in the "National Prosperity Fund" - should be used to support voluntary pensions saving and help development schemes.

But he complained that foreign money was being used to meddle in Russia’s internal affairs and called for tougher laws to fight “extremism”.

“There is a growing influx of foreign cash used to directly meddle in our domestic affairs,” he said. “Some people are not averse to using the dirtiest methods, trying to foment inter-ethnic and religious hatred in our multi-national country.

“In this respect, I am addressing you with a request to speed up the adoption of amendments to the legislation toughening punishment for extremist actions,” he said.

In a clear reference to the opposition, Mr Putin said there were internal forces in Russia which dislike its political stability and steady economic growth and wanted to steal its natural resources - and they were playing into the hands of foreign “colonialists” willing to control Russia.

“We see that even in the epoch of colonialism there was a thesis about the so-called ’civilising role’ of the colonialist states,” Mr Putin said. “Nowadays they make use of democratic slogans, but they pursue one single true goal -- to gain unilateral advantages ... and protect their own interests.”

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