PRESIDENT PUTIN said that he would hold out against European attempts to force Russia to exploit its oil and gas reserves for the benefit of the West.

He said that Russia was determined to tap into its energy potential for its own development, and he warned foreign consumers of his country’s oil and gas that any contracts must be fair and take into account Moscow’s needs and interests.

Mr Putin insisted that Russia would act responsibly in global energy markets but he rejected European Union demands that Russia sign the new EU energy charter, which calls for open access by independent producers to the Russian pipeline network. He said that this would not benefit consumers or bring the price of gas down, would hand over any extra profits to intermediaries and would not offer Russia anything in return.

In a wide-ranging discussion at the weekend with Western academics and journalists in Moscow, the Russian leader insisted that he would not splurge the vast earnings from energy exports. He admitted that there was strong pressure from Russians to use the money to raise pensions, improve health and education and increase social spending. But he said that the so-called Stabilisation Fund would be used only for long-term projects, paying off debts, investing in infrastructure and encouraging high technology. Spending on health and education would not be allowed to outstrip economic development or create inflation, currently at about 9 per cent.

The only special case he allowed was agriculture, which he said still employed 40 million people. “This is their life,” he said. “It is a special sphere.” But petro-dollars would not be used to subsidise agricultural exports or introduce a system like that of Western Europe.

Mr Putin gave a tough defence of Russian policy on Iran, China, Japan and Europe. He repeatedly criticised American policy towards Russia while insisting that he enjoyed good relations with President Bush.

He said that he would leave office in 2008 and not change the constitution to run again. Asked whether he would bow to mounting public pressure to remain as President, he replied: “This shows the wish for a stable state. But stability is not assured by one man alone. It is dependent on the constitution. If I say that everyone is equal under the law, I don’t have the right to make an exception for myself. That would be de stabilising. The State cannot depend on the fate of one man — even if that man is myself”.

Mr Putin said that the main achievements of his presidency had been to restore the authority of the State, the rebuilding of the economy and a reinforcement of Russia’s standing abroad.

He admitted failing to achieve several things. There were still too many people — about 20 million — below the poverty line. Corruption was still a big problem, and Russia’s demographic crisis was far from solved.

Mr Putin recently announced a range of measures to bolster the faltering birthrate and improve life expectancy for men. Mothers will receive new benefits totalling almost $10,000 (£5,300). Money would be available for adoption, maternity leave would increase and male mortality would be reduced by combating alcoholism and the bad accident rate.

The President acknowledged that labour shortages could be alleviated by greater immigration. He said that Russia had always been a multi-ethnic state, and was able to absorb non-Russians because many spoke the language. But he added: “We must also take into account the feelings of the indigenous people. If not, there will be problems.”

On foreign policy Mr Putin made a pointed contrast between the success of relations with China and the failure to resolve differences with Japan. All border issues with China had now been settled, he said, and relations with Beijing were now better than during the Communist era, when there were tensions despite their ideological alliance.

There had, however, been no success in deciding the future of four former Japanese islands occupied by Russia after the Second World War. Mr Putin accused Japan of reneging on earlier offers of compromise and of playing political games over the issue. The Japanese “unleashed the samurai” at election time and then put the sword back again. “Let’s address this quietly and without rhetoric, ” the President said.

On Iran, both Russia and China are against sanctions, but Mr Putin reiterated his opposition to Tehran’s drive to enrich uranium. He said that the line between using this for peaceful or military purposes was fuzzy. He called on Tehran to abandon the programme and accept Russia’s suggestion of special centres outside Iran where there would be free access to the enrichment technology and spent fuel could be handed in.

CENTRE OF POWER

Mr Putin has occasionally attracted internal criticism, most notably for his reaction to the Kursk submarine tragedy in 2000, when 118 sailors died, and for his handling of the 2004 Beslan school massacre, in which 331 people were killed