Pensioners insist compensations for lost benefits are not adequate

But Finance Minister Aleksey Kudrin lashed out at those who have taken part in mass protests against the reform.

He said the protesters were putting the country on "a dangerous line".

Countrywide pensioners' protests, that flared last week, have involved blockades of key highways and other acts of public disobedience.

The allocated money will be spent on additional pension hikes and on transport subsidies for pensioners, policemen and the military, who had been allowed to use public transport for free prior to the reform.

To cover the cost, the government intends to use extra revenues from high oil prices. Mr Kudrin said these expenses will not affect the country's plans to go ahead with an early repayment of its $44bn (�23bn) debt to the Paris Club.

'Political pawns'

The welfare reform is aimed at replacing non-monetary benefits, such as free transport, free medicines and reduced prices for utilities, with cash payments. But many pensioners believe they will be hit hard by the exchange.

Mr Kudrin dismissed the protesters as representing only "1% of all benefit recipients", but said that they were undermining public safety.

"We are on a very dangerous line. In wanting to be heard, they are disrupting transport, blockading roads, dealing an economic blow to regions and harming those who cannot be reached by ambulances," Reuters quotes him as saying.

Mr Kudrin said pensioners were "just pawns in the political struggle".