Loyalty pays off in Putin's Russia as the president backs Medvedev as his successor

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Such is the president's popularity, his support for first deputy prime minister Dmitry Medvedev is likely to ensure his election next March.

With Mr Medvedev, 42, in the Kremlin, observers believe Mr Putin would be able to continue to keep a firm hold on power.

Mr Putin had long been seen as trying to choose between Mr Medvedev, a business-oriented lawyer and Sergei Ivanov, another first deputy premier with a hawkish reputation.

One analyst said: 'Medvedev is not an extremist. He is not known for any kind of harsh views on politics.'

Although he holds powerful positions, Mr Medvedev has been widely seen as a functionary devoted to Mr Putin. That was reinforced yesterday when the president said his election would pave the way for a government 'that will carry out the course that has brought results for all of the past eight years'.

Mr Putin has indicated a desire to remain a significant power figure after the end of his presidential term.