Medvedev made the proposal in an address to a congress of United Russia, the pro-Kremlin party that dominates Russian politics.

Putin, who currently serves as prime minister, took the rostrum immediately after Medvedev and launched into a lengthy lecture on changes and policies he saw necessary for Russia. That included a surprising suggestion that Russia's wealthy should pay higher taxes than average citizens.

The flat income tax that came into effect during Putin's 2000-2008 presidency has been widely praised as improving tax collection. But Putin's proposal for higher taxes for the wealthy appears to reflect growing discontent over the wide gaps between the grandiosely rich and the millions of Russians who continue living in poverty or marginal circumstances.

The congress must formally nominate its candidate, which appeared to be a foregone conclusion judging by the heavy applause that greeted Medvedev's proposal.

The proposal appears to end months of intense speculation over whether Medvedev would seek a second term or step aside in favor of his predecessor.

AP