Russia's Medvedev backs Putin to become PM

By Christian Lowe

MOSCOW (Reuters) - Dmitry Medvedev, named by Russian President Vladimir Putin as his preferred successor, said on Tuesday he wanted Putin to become prime minister under him, mapping out a route for the outgoing leader to retain influence.

But Putin did not say if he would take his long-time ally up on the job offer and some analysts said they believed the powerful Russian leader had still not finally decided what role he will take when he steps down next year.

Medvedev, a 42-year-old first deputy prime minister and chairman of gas giant Gazprom is overwhelming favorite to win a March 2 presidential election after Putin this week endorsed him as his successor.

"Expressing my readiness to stand as a candidate in the presidential election, I ask him (Putin) to agree to head the government of Russia after the election of the new president," Medvedev said in a brief televised address.

Medvedev is one of Putin's most loyal lieutenants who has no political powerbase of his own. Choosing him as the Kremlin's candidate seemed calculated to allow Putin to continue to mould policy after he steps down.

In a country where most power is concentrated in the presidency, with the prime minister taking a junior role, some commentators say that dividing power between the two posts could create a risk of conflicts and instability.

Investment analysts welcomed the prospect of a Putin- Medvedev partnership as a guarantee of stability, at least in the short term.

"On the face of it, that for investors represents a 'dream team' combination," said Chris Weafer, chief strategist at Uralsib bank.