Vladimir Putin has marked the first day of his acting presidency of Russia by paying a surprise visit to Russian soldiers fighting in Chechnya.

Mr Putin - who also remains prime minister - flew to the Russian-held town of Gudermes in the breakaway republic to award medals to the troops.

In a ceremony broadcast live on television, Mr Putin presented soldiers with hunting knives.

"I want you to know that Russia highly appreciates what you are doing," Mr Putin said to officers and soldiers in the town, 18 miles east of the regional capital Grozny.

"This is not just about restoring the honour and dignity of Russia," he said, in remarks broadcast live on Russian television early on New Year's Day.

"It is rather more important than that. It is about putting an end to the break-up of the Russian Federation. That is the main task. Russia is grateful to you."

Before he left the republic, Mr Putin said that Russia would pursue its current military tactics in Chechnya, adding that he had developed the tactics himself.

He said the Russian campaign was not tied down to any specific dates.

"We are going to do everything in an optimal way. Optimal means lowest possible casualties among our troops and absence of casualties among civilians," Mr Putin said.

"You have been told hundreds of times that we are not going to do this by any memorable dates such as New Year."

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Mr Putin was appointed acting president after Boris Yeltsin's shock resignation on New Year's Eve.

He will now serve as acting president until elections on 26 March, three months earlier than planned.

He is by far Russia's most popular politician, largely due to the military campaign against the Muslim rebels in Chechnya.

But he denied that the New Year visit to the troops was the first salvo of his election campaign, saying the trip was planned months ago.

Before he flew to Chechnya, Mr Putin signed a grant of immunity from criminal prosecution for Mr Yeltsin, inviting speculation that a deal had been made to entice the ailing 68-year-old into early retirement.

The decree also gave Mr Yeltsin a lifetime pension and a government country home, bodyguards and medical care for him and his family.

The immunity did not cover Mr Yeltsin's family, members of which have been linked to corruption allegations in recent months.

Mr Putin said on Friday there would be no destabilisation of the country and no change in government policies, including foreign relations.

"There will be no power vacuum even for a moment," said Mr Putin.

But he said efforts to modernise and strengthen the weakened military would continue and the state would ensure stability.

"The freedom of speech, the freedom of worship, the freedom of the press, the freedom of property rights - these fundamentals of civilised society - will be reliably protected by the state," he said in a New Year's address to the nation.

The events caused little commotion in Russia, where most people were busy celebrating New Year - the most important holiday of the year.

And in Chechnya, Russian troops continued their bombardment of regional capital Grozny.

Tanks surrounding the town blasted barrages into the city, although it was unclear whether any progress had been made.

The US said on Friday that Russia launched three Scud missiles into Chechnya.

The missiles were monitored as part of the US-Russia joint surveillance of the effect of the millennium bug on the military, but the Pentagon said the launches were not Y2K-related.

There had been no previous reports of Russia using such heavy weaponry in Chechnya, and Russian sources could not confirm the report.