Moscow, 27 March 2008 – Russia's Medvedev unveils anti-corruption steps

Arbitrary inspections by officials — from firemen to the police — are often an excuse to extort bribes from small firms and must halt, Medvedev told a State Council meeting in Tobolsk.

"This proposal might leave some officials from the fire, sanitary services and police … close to a heart attack, because this is what they make money on — both officially and illegally," Medvedev told the Kremlin's advisory State Council. "The proposal sounds as following: controlling bodies should be barred from entering small enterprises," he added.

"They can only enter if there is an appropriate instruction from a court or prosecutor."

Medvedev also ordered the government to review legislation to protect small companies from being forced to enter dubious contracts with officials.

"It is clear this is a legalized bribe, which was formerly passed on in an envelope and now dressed up in a perfectly respectable form," he said.

Medvedev, who will take over from president Vladimir Putin on May 7, has declared corruption a key threat to his country's modernization and social stability. Kremlin leaders also believe that Russia's future political stability should be supported by a new middle class, formed to a large extent by people running small businesses.

But businessmen complain that the development of small companies is hampered by high taxes, corruption and red tape.