Angry Putin says he will not sell fuel for 'peanuts'

The crisis overshadowed the start of Moscow's stint at the G8 helm and erupted after a pricing row between Russia and Ukraine prompted Moscow to cut off Ukrainian gas supplies in the middle of one of Europe's coldest winters.

The switch-off was portrayed by many in the West as the callous act of a bully using its resources as a political weapon to punish Ukraine for taking itself out of Russia's orbit with a pro-Western "orange revolution". But Mr Putin claimed yesterday that his country had been unfairly vilified by the Western media and that "someone" had used the row to blacken Russia's image in order to pressure it into selling its oil and gas at bargain-basement prices.

His remarks suggest there may be stormy exchanges between G8 leaders and that Russia will continue to refuse European demands for access to its huge oil and gas pipeline network.

"The hysteria that was whipped up by many European and North American media was an attempt to pressure Russia not the Ukraine," he argued. Mr Putin alleged it was ironic that Russia had been made to look like the villain since it had merely decided to apply market principles long cherished in the West.

"The price of gas is not dictated by the Kremlin but by the markets," he said.

In between taking questions on North Korea and Iran's military ambitions, Mr Putin was asked: "Why did he kiss the bare stomach of a boy in a Kremlin courtyard last week, a scene beamed around the world?"

"He seemed to me very independent, very serious, but at the same time a boy is always vulnerable," he said. "He was very sweet. I'll be honest, I felt an urge to squeeze him like a kitten and that led to the gesture that I made."