'New chapter'

Vladimir Chizhov, Russia's ambassador to Brussels, spoke of "opening a new chapter in the relationship between Russia and the EU".

Javier Solana, the EU foreign policy chief, said improving EU access to Russian oil and gas fields would be high on the agenda.

The EU wants to "retune" its energy relations with Russia "based on the principles of transparency, honest competition, reciprocity and the absence of discrimination," Solana said.

But the setting of the summit in a region that produces 7.5 per cent of global oil supply was interpreted by many as a sign that Russia plans to drive home the strength of its energy hand.

Georgia tension

Another potential point of conflict is Russia's increasingly hostile relationship with Georgia.

On Wednesday, Angela Merkel, the German chancellor, said Berlin was "concerned about the steps that have been taken by Russia" in Georgia's breakaway Abkhazia region.

Tension between Georgia and Russia over Abkhazia has escalated since April when Moscow said it would establish formal ties with the separatist government and then boosted peacekeeping troops in the region without Tbilisi's agreement.

Other issues likely to be discussed include Russian objections to the independence of Kosovo and strained trade ties between Moscow and former Eastern bloc countries, including Poland, Lithuania and Ukraine.

The latter, in common with Georgia, has angered Moscow with its wishes to join the Nato military alliance.

The proposed new co-operation agreement is intended to cover the whole of Russia's relations with the EU and replace an existing one dating from 1997.

On Wednesday, a Kremlin official said the talks on the cooperation agreement would take a year at best before the 27 EU nations can attempt to ratify it.