President Vladimir Putin [Images] on Friday declared that Russia [Images] was ready to face the challenge of a fresh round of arms race initiated by the West, which is using its technological advantages to develop new weapon systems.

"It is evident that a new round of arms race is unfolding in the world, which regretfully does not depend on us, its not we who started this. Most developed nations, resting on their technological advantages are diverting multi-billion funds on the development of next generations of defensive and offensive weapons.

"Their defence spendings are simply not comparable with ours, tens of times more than we are doing," Putin said, addressing the country's advisory state council.

Accusing the US-led western military bloc, North Atlantic Treaty Organisation, of ignoring Russia's security concerns Putin said: "We are virtually being forced to face the necessity of taking concrete actions, adequate decisions. To all these challenges Russia has and will have response."

Putin, in his speech laying the guidelines of the former Communist nation's innovative development till 2010, said that for decades Moscow [Images] has been fulfilling its international obligations in the field of security but NATO demanding their unilateral implementation by Russia has moved its military infrastructures closer to the borders of the country.

"We closed our bases in Cuba and Vietnam, what have we got in return? New American bases in Romania, Bulgaria, shortly and a new positional area of Anti-ballistic Missile Defence would probably appear in Poland and its element in Czech Republic.

"They are trying to convince us that all these actions are not directed against Russia on the other hand, to our quite solid concerns, there is no constructive answer," Putin said.

The Russian President, who would be handing over top Kremlin job to his successor in May after serving eight years in the top post, called for development of the 'innovative armed forces' equipped with futuristic hi-tech weapons till 2020, which could be able to face new emerging threats and challenges.