Putin signed a protocol with his Turkish counterpart Recep Tayyip Erdogan in Ankara to start exploration work on the South Stream pipeline, which is aimed at protecting Moscow's dominant share in the European gas market.

Italian Prime Minister Silvio Berlusconi was also present at the signing.

"South Stream is a project that a lot of people are waiting for. It is very important for the whole of Europe," Putin told reporters after Erdogan announced Turkey had allowed geological surveys in its waters in the Black Sea.

Russia has been promoting South Stream as an alternative route to Europe after a price row with Ukraine in January left millions without heating in winter for and sparked accusations Moscow was using gas as a political weapon.

Thursday's protocol came as the Russian government announced in Moscow that it had formally rejected participation in a European energy charter originally adopted in 1991 and aimed at integrating energy systems across Europe.

The rejection of the charter, which the European Union has repeatedly pressed Russia to ratify, was a "new political gesture" to the West that Russia has its own agenda on energy matters, energy expert Vladimir Milov said.

The South Stream project, to be realised by Russian gas giant Gazprom and Italy's Eni, is a rival to the EU-backed Nabucco conduit which plans to carry Caspian and Middle East gas to Europe via Turkey, by-passing Russia.

But Erdogan, whose country also hosted the signing of the Nabucco accord last month, insisted that "the South Stream and Nabucco projects should not be seen in the context of rivalry but of diversification."

Russia would like to by-pass Ukraine and use Turkish territorial waters for the 900-kilometre underwater section of the pipeline which it wants to have operational at 2013 at the earliest, but its precise route is not yet clear.

Thursday's protocol also involves plans to extend the existing Blue Stream gas pipeline between Turkey and Russia, which came online in 2003, southwards to Cyprus, Israel, Lebanon, and Syria, Erdogan said.

Russia in turn promised to support a planned Turkish oil pipeline from the Black Sea port of Samsun to Ceyhan on the Mediterranean, which already serves as a terminal for conduits from Azerbaijan and Iraq, he added.

Putin hailed Turkey's growing role in gas and oil pipeline projects, saying that "Turkey will become a major transit centre in the region."

Officials from both sides also signed cooperation accords on the peaceful use of nuclear energy and exchange of information on nuclear energy facilities.

Russia is eager to secure a tender Ankara launched in January for its first nuclear power plant on a build-operate-transfer model in which a partnership led by Russia's state firm Atomstroyexport was the only bidder.

Turkey insists the consortium lower its proposed price for supplying electricity, while Moscow is offering loans to the consortium for the construction of the 4,800-megawatt power plant, a Russian official said.

Putin argued the price the company had offered was below international market levels, but both leaders said more talks were needed to strike a deal.

Ankara's plans for a nuclear plant have met with strong opposition from environmentalists on the grounds that the proposed site on the Mediterranean shore is close to a seismic faultline.

There was a small protest by Greenpeace members against the nuclear project in Ankara and two of them were detained by security forces as Ankara imposed tight security for Putin's visit.

burs-han/dt

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