The Bank of New York has co-operated in the US investigation

However, Treasury Secretary Lawrence Summers said tighter controls must be imposed on Moscow to account for how it spends international aid.

His comments follow allegations that Russian gangsters illegally channelled billions of dollars in loans and mafia money through the Bank of New York.

Mr Summers said failure to help Russia overcome its economic problems would jeopardise the country's recovery and the process of democracy.

"To quarantine, contain or write off Russia as too corrupt would ill serve our national interest," he told a congressional committee.

But he said the International Monetary Fund (IMF) and the World Bank should apply strict conditions of financial integrity so that Russia used future assistance solely for its intended purpose.

He added that American laws would be strengthened making it harder for foreigners to use their illegally-gained money through American banks.

Swiss freeze accounts

Mr Summers was speaking as the first witness at a House of Representatives banking committee investigating the money laundering claims.

The start of the hearing coincided with news that the Swiss authorities had frozen $16.8m on Russian accounts suspected of being linked to the scandal.

Meanwhile, US newspaper reports have for the first time implicated Russian officials, as well as gangsters and businessmen, in the case.

Russian Foreign Minister Igor Ivanov said on Monday that Moscow supported all efforts to get to the bottom of the allegations - the people of Russia, he said, were the victims.

IMF loans

Press reports in Moscow said IMF credits to Russia may have been involved in the alleged scandal.

Mr Summers said the IMF, at Washington's insistence, had already acted to ensure its billions of dollars in loans were used for legitimate purposes.

Russian leaders have tried to play down the money laundering crisis

Russia's current $4.8bn loan programme to Russia is being provided in such a way that Moscow can only use the money to pay back previous IMF loans, he said.

Russia still owes $16bn out of the $22bn lent by the IMF since 1992.

On Monday, Russian Prime Minister Vladimir Putin said investigators sent to the US by Moscow were given no proof of Russian involvement in the money laundering.