In an address to parliament, Mr Putin condemned Nato's expansion and the US plan to include Poland and the Czech Republic in a missile defence shield.

"It is already clear that a new phase in the arms race is unfolding in the world," Mr Putin said.

He said other countries were spending far more than Russia on new weapons.

But Russia would always respond to the challenges of a new arms race by developing more hi-tech weaponry, he said.

Military muscle

Referring to Nato's activities in Central and Eastern Europe, Mr Putin said "there are many discussions on these, but... we have still not seen any real steps towards finding a compromise".

"In effect, we are forced to retaliate, to take corresponding decisions. Russia has, and always will have, responses to these new challenges," he said.

In December, Russia said it was planning naval exercises in the Mediterranean Sea and the Atlantic Ocean.

It has also resumed long-range patrols by its bomber aircraft.

The practice was suspended after the collapse of the Soviet Union and was revived last August, as part of a more assertive foreign policy pursued by President Putin.

Higher oil prices have enabled Russia to reinvest in its armed forces, but its military capabilities remain far below what they were during the Soviet era, correspondents say.

(BBC)

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