Putin lauds intelligence as key Russian institution

MOSCOW, Oct 19 (Reuters) President Vladimir Putin described the foreign spy service today as one of Russia's key institutions and said the appointment of ex-Prime Minister Mikhail Fradkov as its head could only enhance its authority.

Putin, himself a former KGB spy, has put former colleagues in senior government posts. His critics say Russia is run by a hidden network of former and serving secret service operatives.

''Fradkov's appointment as the director of the SVR (foreign intelligence service) underscores the important place foreign intelligence plays in the system of Russia's state institutions,'' Putin said in televised remarks.

''The SVR is one of the most professional and effective special services, which should continue defending Russia from outside threats,'' he said as he presented Fradkov to his staff.

US intelligence officials said earlier this year, that Russian spying in the United States had returned to Cold War levels. British intelligence has made similar statements.

Putin, due to step down next year, has done much to revive the security services as a privileged force. With the collapse of the Soviet Union, the old monolithic KGB had came under critical scrutiny and was split into domestic and overseas arms, their political influence pruned back.

Under Putin, things have changed for the ''Warriors of the Unseen Front''. Ex-KGB officers personally loyal to him have occupied many important government positions. Former KGB spy First Deputy Prime Minister Sergei Ivanov is widely seen as a possible successor to Putin.

MAINTAINING CONTROL Analysts say installing personal allies in top positions is part of Putin's plan to maintain control over the country after he quits in May next year.

Putin has kept his own plans a secret, but has made clear he will retain political influence after he steps down.

Speaking to top spies today, Putin said lack of spying experience was not a problem for Fradkov -- whose previous jobs were mainly connected with the economy.

''I think the man who headed the government for more than three years does not need any extra recommendation,'' he said. ''Because of his previous jobs, Fradkov knows how intelligence works, knows in person its leading figures.'' Putin said he wanted the SVR to help fight terrorism, but also expected Fradkov to build up efforts in economic espionage.

''(The SVR) should quickly and comprehensively analyse changes in the international economic environment, calculate the consequences for the national economy and of course protect more actively the interests of our companies abroad,'' he said.

Russia, whose economic growth has made it increasingly active in world markets, complains that its companies are discriminated against in Europe and the United States, when they try to make acquisitions in politically-sensitive sectors.

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