Asked by a reporter whether he would rule out returning to the presidency next year, Putin said: "The next elections in the Russian Federation are in 2012 ... we will have to get through to that time, then we will see."

Medvedev prompted speculation about an early Putin return to the Kremlin last month when he unexpectedly proposed lengthening the presidential term to six years. The move, widely seen as intended to benefit Putin, was rushed through parliament.

But Putin told reporters he was satisfied with the "tandem" style of government. This has seen the two men collaborating closely, albeit with Putin perceived to hold the upper hand.

"We have formed a very effective tandem with President Medvedev," Putin said. "We have worked together for many years."

The exchange came after Putin's annual question-and-answer session with Russians, a three-hour eight-minute discussion broadcast live by state television and radio.

This was a more downbeat occasion than in previous years, with questions about the economic crisis predominating, and the prime minister looking at times tired and strained.

Putin avoided the harsh rhetoric he has used in previous years against the West and appeared to offer an olive branch to the incoming administration of President-elect Barack Obama.

He described as "positive signals" from Obama's team signs that it was prepared to listen to Russian concerns over NATO expansion and the deployment of an anti-missile system in eastern Europe -- something Russia says threatens its security.

"We hear that one should build relations with Russia, taking into account its interests," Putin said. "If these are not just words, if they get transformed into a practical policy, then of course our reaction will be appropriate and our American partners will feel this at once."

RUSSIA TO SURVIVE CRISIS

There was no such comfort for neighbouring Ukraine, which has angered Moscow by pursuing a pro-Western foreign policy and failing to pay its large gas bills on time.

Putin ruled out concessions to Kyiv on gas prices, saying it was already paying much less than other European countries and threatened to cut off supplies if any Russian gas was siphoned off during transit through Ukraine.

Putin is fighting to maintain his status as Russia's most popular politician as the global financial crisis hits his country harder than the government had anticipated.

The first of the 72 questions set the tone. A caller who had just lost his job asked how he could survive and Putin responded by saying the economy would recover and unemployment benefit was rising in the interim.

Others asked about problems with getting mortgages, with healthcare, housing and surviving on state pensions.

"We have good chances to go through this difficult period with minimal losses both for the economy and ordinary people," Putin said. "We intend to deliver on all our plans to increase social allowances."

Russians, fearful of a repeat of an economic crisis in 1998, have been withdrawing roubles from banks and buying dollars, putting pressure on the national currency.

Putin repeated government promises that there would be no sudden, sharp devaluation of the rouble but did say the currency would fluctuate along with commodity prices, a form of words which could suggest a gradual, slow depreciation of the rouble.

He also said the state could take stakes in major Russian companies to help them combat the crisis. Such measures, he added, could be "rather large-scale".

For the most part, the session was bereft of Putin's trademark humour and sometimes coarse quips.

But when questioned about French media reports that he had called for Georgian President Mikheil Saakashvili to be "hung by his balls" for his role in Russia's war with Georgia, Putin recovered some of his old poise: "But why only by one part?" he answered, before launching into a denunciation of his old foe.

Putin instituted the annual session, called "A Conversation with Vladimir Putin", when he was president and has decided to continue it in his new role.

Medvedev has given no indication that he plans any such similar session and Putin barely mentioned the president.

Viewers and listeners submitted questions in advance. There were live television links to questioners in the regions, including military staff at a submarine-building facility in the Arctic. Officials said that the call centre had received 1.5 million phone calls and over 600,000 text messages