Russian President Vladimir Putin on Thursday defended the effective renationalisation of the core assets of Yukos oil group, arguing that the state had every right to make amends for the flawed privatisations of the early 1990s.

Speaking at a three-hour press conference in the Kremlin, Mr Putin said: ?You all know very well how privatisation took place here in the early 1990s and how, using various tricks, and sometimes violating the laws, many market participants got hold of state property worth many billions [of dollars].

?Today the state, using absolutely legal market mechanism, is securing its interest. I consider this to be quite normal.?

Mr Putin has previously insisted that Yukos was pursued because of its failure to pay its taxes. But Thurday's statement provided a new justification for the Yukos saga one that could equally apply to other companies created by the privatisations of the 1990s.

Late on Wednesday night Rosneft, the state oil company chaired by the deputy chief of Mr Putin's administration, took control of Yuganskneftegas, Yukos's main production asset accounting for 11 per cent of all Russian oil production. Yuganskneftegas had earlier been bought at auction by Baikal Finance Group, a mysterious bidder.

Rosneft, which paid $9.35bn for the oil producer, far less than its market value, is merging with Gazprom to create a giant national company. Mr Putin insisted the auction was in keeping with a Russian law, but many observers said the deal was as murky as the privatisation of the early 1990s.

The US on Thursday voiced dismay at the takeover. ?We certainly don't think [the case] has been disposed of in a transparent or open way,? said a State Department spokesman.

A combative Mr Putin also ridiculed the decision of the Houston court that issued an injunction last week against the sale of any of Yukos's assets, after the company had filed for bankruptcy protection in the US.

Mr Putin said the ruling issued by a US judge, ?who probably does not know where Russia is?, raised questions about the competence of the Texas court. He said the judgment was an example of the US's attempt to dominate the world and typified its double-standards towards Russia.

He also lashed out at criticism of Russia's role in Ukraine. ?An intention to limit Russia's opportunities for developing relations with its neighbours . . . amounts to a wish to isolate the Russian Federation,? he said.

Mr Putin rejected US criticism of the state of democracy and the rule of law in Russia, accusing Washington of intimidating voters. ?We are not exactly thrilled by what is happening in the US. Do you think that the electoral system in the US is without flaws? Need I remind you of how elections were held in the US??

Signalling Russia's determination to be counted as an equal partner to the US, Mr Putin said: ?With the United States, we are the biggest nuclear power in the world and have a special responsibility in terms of arms control and [the] non-proliferation of weapons of mass destruction?.