Vladimir Putin boasted yesterday that Russia was well prepared to survive the global financial crisis while the West had been caught off guard.

The Prime Minister told a meeting of foreign investors that Russia's economy was "rather well prepared for lengthy external shocks", despite a fall in oil prices and a stock market slump that has wiped 70 per cent off share values.

"We did not allow ourselves to be caught unawares by the financial crisis," Mr Putin said. "American, European, British structures, despite all the differences in how their systems are organised and how they work, were caught equally unawares."

He said that Russia could finance its development without foreign aid if the West plunged into an economic depression, citing its massive currency reserves of more than $530 billion (£310 billion) built up from soaring oil and gas revenues before the crisis struck.

"We have taken into account potential threats while building financial and economic policies," he said. "We can to a great extent fund economic growth from our internal resources."

Mr Putin may be confident but Russia's billionaire oligarchs have taken a hammering, losing an estimated $230 billion as stock markets around the world have gone into meltdown.

Oleg Deripaska, Russia's richest man, worth $28 billion before the crash, has been forced to sell assets as creditors called in loans secured against the falling value of shares in his global aluminium-to-car parts empire.

Bloomberg, the financial news service, estimated this month that Roman Abramovich, the owner of Chelsea football club, had lost more than $20 billion on paper as the price of his shares in Evraz, a steel producer, collapsed.

Mr Putin sought to talk up confidence, saying that the Reserve Fund of surplus energy revenues would plug holes in spending if the oil price fell below $70 per barrel next year, the break-even point for the state budget.

He played down the impact of capital flight from Russia, claiming that there had been no overall loss of funds so far this year. A senior government official admitted last week, however, that Russia had suffered a "nightmare" loss of $33 billion in August and September.

The Goverment will move to shore up the financial system on Tuesday by authorising the deposit of up to $50 billion in VEB, the state development bank. The money will be dispersed to other banks and companies desperate to pay off foreign debts.

Demand is likely to outstrip supply, however, after VEB gave warning last week that it had already received bids for more than $50 billion in aid. Another $36.3 billion of state funds is being channeled into long-term loans for banks.

Mr Putin is chairman of VEB's supervisory board, made up entirely of government ministers. The Soviet-era foreign trade bank was transformed into a national development bank in 2006, tasked with financing government investments in infrastructure and key economic projects.

Russia's stock exchanges have taken a hammering since the financial crisis broke. But they moved up marginally yesterday in response to government plans to spend $6.7 billion buying shares in Russian companies to boost the market.

The dollar-denominated RTS index was up 4.9 per cent to 700.4 points, while the larger MICEX exchange, which trades in roubles, rose 4.5 per cent to 626.4 points.

Mr Putin also pledged an additional 200 billion roubles ($7.68 billion) yesterday to expand a government scheme for protecting bank deposits. He said that the Deposit Insurance Agency would be empowered to recapitalise banks and "allow them to work stably".

Igor Shuvalov, the deputy prime minister ,said later that the agency would also be allowed to take over struggling banks. Russia has spent $5.5 billion on bank bailouts to avert panic among a public whose memories of the 1998 default remain fresh.

VEB bought Globex bank, one of Russia's top 50 institutions, for a nominal £110 on Friday after it ran into trouble. The Government has also bailed out Svyaz, KIT Finance and Sobinbank this month.

"Protecting the interests of its citizens, protecting the savings of ordinary investors, is one of the Russian Government's absolute priorities," Mr Putin said.

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