Russia's Putin anoints ally Medvedev for presidency

By Christian Lowe

MOSCOW (Reuters) - Russian President Vladimir Putin backed his long-time ally Dmitry Medvedev to succeed him on Monday, preparing the way for Putin to exercise power from behind the scenes after he leaves the presidency next year.

Medvedev, a 42-year-old first deputy prime minister and chairman of gas giant Gazprom, is seen by markets as business-friendly and less hawkish than his Kremlin peers, but analysts said Putin would be the real power in the land.

Putin's choice brings an end to years of speculation and puts Medvedev in pole position to win a March 2 presidential election because most Russian voters say they are prepared to back whoever the popular Putin endorses.

The Russian president, required by the constitution to step down after serving two consecutive terms, issued the endorsement at a meeting with four party leaders who backed Medvedev.

"I have known him very closely for more than 17 years and I completely and fully support this proposal," Putin was shown saying on state-run television.

"We have a chance to form a robust administration for the Russian Federation after the March elections...an administration that will carry out the same policies that have brought us results for the past eight years."

Medvedev is a trained lawyer from Putin's hometown of St Petersburg. The two men worked together in the city administration in the 1990s. Putin brought Medvedev to Moscow as a key lieutenant shortly before he became president.

Medvedev is softly-spoken and sometimes stiff in front of television cameras. He has adopted many of the mannerisms of his mentor: he uses the same clipped diction and, like Putin, often wears polo shirts under his suit jacket.

If he wins the election, he will be the youngest Russian head of state since Nicholas II, the last Tsar.

AGGRESSIVE TACTICS

Medvedev has been cast by investment analysts as a liberal who is less confrontational towards the West than many of his Kremlin colleagues.

But he has also been at the heart of an administration that has aggressively asserted its interests.

Under his chairmanship, Gazprom has renegotiated energy projects with multinational companies and taken a tough line with foreign customers, notably former Soviet republics accustomed to subsidized deliveries.

"The choice of Medvedev ... reflects Putin's desire to have the most obedient figure," said Yevgeny Volk of the Heritage Foundation think-tank. "Putin views Medvedev as a subordinate on whose loyalty he can count."

Russian stocks powered into record territory on news that Putin had thrown his weight behind Medvedev. Shares in Gazprom, Russia's largest company gained 2.1 percent.