Medvedev Says Russia Needs 'Comprehensive' Political Reform, Slams 'Extremists'

President Dmitry Medvedev on Thursday warned that "extremists" were seeking to whip up instability in Russia through the protest wave that has rattled the Kremlin after disputed parliamentary polls.

In his last annual address to the nation before his expected handover of power to Vladimir Putin next year, Medvedev sternly vowed that Russia would not allow the West to interfere in its biggest outburst of protests in years.

But seeking to acknowledge that the mood in the nation was changing after 12 years of dominance by Putin, he proposed a range of political reforms including the resumption of direct elections of local governors.

"Attempts to manipulate Russian citizens, lead them astray and incite strife in society are unacceptable," he said, two days ahead of a new opposition protest in Moscow expected to rally tens of thousands.

"We will not allow provocateurs and extremists to drag society into their schemes," Medvedev said, adding: "We will not allow interference from outside in our internal affairs."

"Russia needs democracy and not chaos," said Medvedev.

Medvedev's annual address to both houses of parliament came after December 4 parliamentary elections that showed an unexpectedly sharp drop in support for the ruling party and were followed by mass demonstrations against vote-rigging.

Tens of thousands of people took to the streets a week after the elections to protest the conduct of the polls while almost 40,000 people have vowed on Facebook to attend a new rally in Moscow on Saturday.

It was Medvedev's last address to the Federal Assembly before he steps down for Putin -- currently prime minister -- to take his place after March polls. The arrangement has angered the opposition for being cooked up behind closed doors.

The outgoing president sought to show he was in favor of protests, so long as they were within the framework of the law, and acknowledged that Russian society was in a state of change.

"We understand criticism and accept criticism with respect. The right of people to express their position with all legal means is guaranteed," Medvedev said.

"The fact that society is changing and citizens are more actively expressing their positions and making demands on the authorities is a good sign."

In an apparent nod to the demands of the protestors for more democracy, he proposed major reform of Russia's political system, including the resumption of direct elections for local governors.

"I propose a comprehensive reform of our political system," Medvedev said.

"I would like to say that I hear those who are talking about political changes, and I understand them. We have to give all active citizens the legal right to participate in political life," he said.

Direct regional elections were abolished by Putin in 2004 in what has long been seen by analysts as one of modern Russia's greatest democratic shortcomings.

Under the current system, the Kremlin chooses new governors from a shortlist presented by the ruling party. The appointment is then rubber-stamped by the local parliament.

Medvedev also proposed a cut in the signatures required for a candidate to register for presidential elections from the current two million to 300,000 for candidates from parliamentary parties and 100,000 for those not represented in parliament.

He said the rules for party registration should be simplified so that an application from 500 people from at least half of Russia's regions would be sufficient to register a party.

The president said Russia should create a "public television" channel on which neither the state nor the private owner had the ultimate influence.

Medvedev, who portrays himself as a champion of modernizing the Russian economy, said Russia had to sharpen its competitiveness due to a global economic depression that "could last several years".

"The competition for the minds, the ideas, the resources -- it will only get stiffer and we are in the epicenter of this race," he said.