Dmitry Medvedev, nominated as a candidate for next March's presidential election, has proposed Russian President Vladimir Putin as prime minister after he leaves the Kremlin, while vowing to maintain policy continuity.

"As I confirm my readiness to run for Russian president, I request that he (Putin) gives his principal consent to head the Russian government after the new president is elected," RIA news agency quoted Medvedev as saying.

Putin, who is barred by the constitution from a third consecutive term, said Monday he would support Medvedev to run for president. Medvedev is currently first deputy prime minister and backed by pro-Kremlin parties of United Russia, Fair Russia, and Agrarian and Civil Force as presidential candidate.

Given Putin's great popularity, his preferred successor is likely to win the election, observers here said.

Medvedev, 42, is expected to be officially nominated for the candidacy at the United Russia congress on Dec. 17. He is now carrying out consultations with parties on his candidature.

His colleague and onetime competitor, also first deputy prime minister, Sergei Ivanov has also expressed support to the nomination.

In a television address on the Vesti-24 TV channel Medvedev pledged to maintain the continuity of policies forged by President Putin, praising Russia's economic progress and growing importance in the international arena under the leadership of Putin.

"Over the past few years the authorities have managed to ease poverty, create an up-to-date health service and education, cope with the acute housing problem and achieve a new quality of life in rural areas," Medvedev said.

"Our task is to increase the real incomes of all citizens. To give senior citizens a decent life, and create the necessary conditions for young people to develop. Industries and agriculture must continue to be invigorated. Russia's role in world affairs must be enhanced. Lastly, the gravest demographic problem must be resolved," he said.

"These goals will remain relevant for decades. This is precisely the reason why the policy that took shape in the late 1990s should be continued. To move on along this path it will not be enough to elect a president who shares this ideology. It is as important to preserve the capability of the team the current president has formed," he said.

Putin, 55, has pledged to step down after next March's election but vowed to retain influence on policy-making. There have been suggestions he assume the post of parliament speaker or of prime minister but he has not confirmed either.

In the presidential elections there will be a "vote of confidence" in a person for whom "the further progressive, democratic movement of Russia and compliance with the liabilities to the people will be the indisputable benchmark and priority," Itar-Tass cited Putin as saying in a meeting with foreign ambassadors on Tuesday.

Medvedev, a former law professor and close ally of President Putin, was promoted to the position of presidential chief of staff in 2003 and took the post of first deputy prime minister in 2005, following Putin's steps.

Medvedev was reappointed with the same position in Sept. 24, 2007 in a government reshuffle, and was in charge of the economy and social development affairs covering public health, education, housing and agriculture.

Investors have expressed optimism for the pro-liberal candidate, who is also chairman of Russia's gas and oil giant Gazprom. The RTS and MICEX indices of the stock market hit new highs on Monday and Tuesday.

"In the context of the discussions recently begun about strengthening the state's role in the economy, the candidacy of Dmitry Medvedev is optimal for putting an end to a 'velvet reprivatization,'" Interfax cited Alexander Shokhin, president of the Russian Union of Industrialists and Entrepreneurs, as saying.

The presidential race formally kicked off in Russia on Nov. 28 when the date for elections to choose a successor to Putin was set for March 2, 2008.

Editor: Yan