Mr Berlusconi emerged as a strong ally of Mr Putin

Speaking after a summit with European Union leaders in Rome he said his aim was to establish order in his country.

European Commission President Romano Prodi said he had been reassured the rule of law was being applied fairly.

But the US, which was not involved in the talks, says concerns persist that the arrest was politically motivated.

No blackmail

The detention of the head of the Yukos oil giant, Mikhail Khodorkovsky, on fraud charges two weeks ago has raised international concern about Mr Putin's authoritarian tendencies.

Critics have suggested Mr Khodorkovsky's interest in politics made him an unwelcome rival to Mr Putin as parliamentary and presidential elections approach.

Even as the talks were going on in Rome, Russian authorities were taking new action against Yukos.

A court stripped the political immunity of Vasily Shakhnovsky - a shareholder with a 3% stake in Yukos - opening the way for potential prosecution.

I'm acting as President Putin's defence lawyer here, even though he hasn't asked me to Silvio Berlusconi

And the agriculture ministry reportedly said irregularities had been found in farms owned by a Yukos subsidiary.

Mr Putin said Russia would stage a "consistent and tough" crackdown on all illegal activities in Russia regardless of who the perpetrators might be.

"Our aim is not to go after specific individuals but to establish order in our country," he said.

He said oligarchs who grew rich through privatisations spent "hundreds of millions of dollars" to defend their position, to pay the best lawyers and incite the media to attack the government over the affair.

"Attempts to blackmail the state authorities will fail," he said.

Europeans soothed

Italian Prime Minister Silvio Berlusconi fended off journalists' questions about the affair at the news conference following the summit.

"I know President Putin well enough to be myself the guarantor of his precise knowledge of the distinction of the separation between the executive and the judiciary power."

"I'm acting as President Putin's defence lawyer here, even though he hasn't asked me to," he said.

He also leapt to Mr Putin's defence on the thorny issue of Chechnya, accusing European media of peddling lies about the conflict.

Mr Prodi said the summit had soothed European concerns about the Yukos case.

"We have been reassured that the law will not be applied in a discriminatory manner. We wanted this assurance because this is key for further co-operation in the economic field," he said.

But White House spokesman Scott McClellan said it was "important for Russian authorities to dispel any concern that this case is politically motivated".

"The manner in which the case is being addressed has raised some serious concerns about the state of rule of law and the business and investment climate in Russia," he said.

The summit did result in a number of bilateral agreements, including a pledge to push for Russia's membership of the World Trade Organisation by the end of next year.