Russian President Vladimir Putin set himself up to rule for life today after announcing sweeping reforms with his entire government resigning to clear his path.

In an address to the nation, the former KGB agent - whose term ends in 2024 - described how power was being shifted from the presidency to parliament.

Prime Minister Dmitry Medvedev said his resignation was necessary for Putin 'to make all decisions' and was installed in the mysterious position of deputy head of the presidential Security Council.

Putin's murky reforms are expected to be a straight swap, turning the presidency into the ceremonial role so that he can become the newly-empowered prime minister.

Opposition leader Alexei Navalny called the reforms 'fraudulent crap' that would end with Putin being 'sole leader for life'.

Dmitry Medvedev (centre) resigned as Russia's Prime Minister on Wednesday, saying it was necessary while President Putin reforms the country's constitution

Analysts believe that Putin wants to transform the presidency into a ceremonial role before stepping in as newly-empowered prime minister when his term ends in 2024 - a move that would allow him to rule for life

As Medvedev's successor, Putin nominated the little-known head of Russia's tax service, Mikhail Mishustin (pictured)

British government sources have suggested that Putin's hand has been forced by a rising populist movement across the globe and increased opposition among his own people.

His economy has also taken a blow from US and European sanctions so a firm grip is needed to face down any potential insurrection by the masses.

Putin said any constitutional changes would have to be put to the people in a referendum, the first that Russia will have held since 1993.

Medvedev served as president from 2008 until 2012 when Putin was forced to step down due to term limits.

When Putin returned as president in 2012, Medvedev was appointed prime minister, a position he had held ever since.

He will remain in power despite Wednesday's resignation, as Putin appointed him to the newly-created position of deputy leader of the presidential security cabinet.

In Medvedev's place, Putin nominated the little-known head of the Russian tax service Mikhail Mishusti.

Medvedev announced his resignation on state TV sitting next to Putin, his mentor.

Putin, who has been governing in tandem with Medvedev since 2008, thanked his former protege for his efforts but said the cabinet had 'failed to fulfill all the objectives set for it'.

'I want to thank you for everything that has been done, to express satisfaction with the results that have been achieved,' Putin said.

'Not everything worked out, but everything never works out.'

Putin has asked for the outgoing government to remain at work until a new government was appointed.

Medvedev said the government was resigning to 'provide the president of our country with the possibility to take all the necessary measures'.

'All further decisions will be taken by the president,' he said.

Medvedev announced his resignation following a speech in which Putin announced he would be making changes to the constitution to empower parliament

Mikhail Mishustin: hockey-loving taxman picked by Putin as Russian PM Regular ice hockey player Mikhail Mishustin is likely to be Russia's next Prime Minister after Vladmir Putin put his name forward today. The 53-year-old had headed Russia's tax service for a decade and also has a PhD in economics. His career started in the 1990s where he headed up an organisation set up to promote international cooperation in computing. In 1998 he became deputy head of the tax service. He was soon appointed deputy tax minister, which he held until 2004. Russian President Vladimir Putin (not seen) meets head of Russia's Federal Tax Service Mikhail Mishustin in Moscow, Russia on January 15 For the next four years he headed up federal agencies and in 2008 he became president of an asset management firm. In 2010 he was appointed the head of the tax service after he was proposed by the finance minister at the time, Alexei Kudrin. In 2015 he was listed as Forbes' 54th best-paid state official in 2015 with earnings of 183.31 million rubles (£2.6 million). Following Putin's proposal, state TV claimed he had 'created the best tax collection system in the world.' It is thought that he was picked to create a 'more competent leadership'. He is seen as a 'neutral figure' and has previously proposed that Russia needs to adapt its economy in order to include new and developing technology. Mishustin told the Kommersant newspaper last year that Russia needs to adapt to the era of digital technology and artificial intelligence or fall behind. 'This is already a digital world,' he said. 'If we don't understand how this world is developing and what its rules are, if we insist our country is part of the old order, this new world will make us its victim.' He is also a member of the supervisory council of CSKA hockey club, along with Rosneft chief Igor Sechin and other powerful figures. The RBK business newspaper reported in 2010 that Mishustin has 'good contacts in the law enforcement structures. He has often been seen at hockey matches with senior officials from the FSB (security service) and the interior ministry.' Advertisement

Putin said Medvedev would take on a new job as deputy head of Russia's Security Council, which Putin chairs.

The 67-year-old Putin is due to step down as president in 2024 and the Russian constitution prevents him from running for a third consecutive term.

The Russian political world is already abuzz with speculation about how Putin might stay in power, although he himself has said almost nothing on the subject.

At his annual address to lawmakers today, he announced plans for package of reforms which could allow him to carve out a new role as a powerful PM.

Under the reforms, Putin's successor as president would be stripped of the power to choose the prime minister.

Russia's parliament - the State Duma - would select a prime minister and the president would not have the power to reject them, Putin said.

The changes would also give parliament the power to choose senior cabinet members, further weakening a future president's authority.

However, the president would still be able to fire the PM - although Putin's high approval ratings might make that politically infeasible.

Other changes would see the role of regional governors enhanced and residency requirements tightened for presidential candidates.

'Of course these are very serious changes to the political system,' Putin said in a speech today as he promised a referendum on the plans.

'It would increase the role and significance of the country's parliament ... of parliamentary parties, and the independence and responsibility of the prime minister.'

Putin has been in power as either president or prime minister since 1999, longer than any other Russian or Soviet leader since Josef Stalin.

A former KGB officer, first took power as acting president when Boris Yeltsin unexpectedly resigned on the last day of the millennium.

After his first two terms as president ended in 2008, Putin circumvented the term limit by shifting into the prime minister's seat while Medvedev served as president.

Putin was widely seen as pulling the strings under Medvedev, although they clashed over intervention in Libya in 2011.

In 2012 Putin returned to the top job and appointed the loyal Medvedev as prime minister.

The switch of jobs was widely seen as a cynical ploy and sparked massive protests in 2011-12 in a major challenge to the Kremlin.

Re-elected to a six-year term in 2018, Putin has seen his approval ratings fall to some of their lowest levels, though still far above those of most Western leaders.

Recent polls put Putin's rating at 68-70 per cent, up a few points from a year ago but down from a high of more than 80 per cent at the time of his last election.

His loyalists in the United Russia party have also suffered dismal ratings and suffered badly in Moscow local elections last year.

Another option for Putin would be to merge Russia with Belarus - a process which has long been the subject of speculation - and become head of a new unified state.

Putin previously served as prime minister for four years while Medvedev was president (they are pictured together in Moscow in 2008)

Medvedev will stay on in government in the newly-created post of deputy of the presidential security cabinet (Putin and Medvedev talk in Moscow on Wednesday)

Russia is Belarus's closest ally and the two have formed a nominal 'union' with close trade and military cooperation.

Putin played down such speculation last year, saying there were no plans for a merger with Belarus.

Belarussian leader Alexander Lukashenko has been more blunt, saying last year that unification 'was not on the agenda.'

MARK ALMOND: Like Stalin, he'll rule to the death

He likes to take the world – and Russians – by surprise. Vladimir Putin's lengthy State of Russia speech yesterday was expected to be the usual tedious outline of statistics and policy developments.

No doubt the Kremlin audience of veteran apparatchiks planned to do their 'sleeping-with-the-eyes-open' trick. Then Mr Putin pulled his rabbits out of the hat.

Russia needed more democracy. Parliament should have a bigger say in choosing the government. The position of the president – all-powerful until now – should be cut down to size.

And so on... a raft of sweeping, bold constitutional change that seemed – whisper it – to be preparing Russia for life after Vladimir Putin. He even complained about how time-consuming being president of Russia is. He's 67 after all and has been at it 24/7 for 20 years.

Russian President Vladimir Putin walks along St.George's Hall to take part in an inauguaration ceremony in Moscow's Kremlin, May 7, 2004

Shortly afterwards, Putin's longtime political ally, the prime minister, Dmitry Medvedev, stood down – he made the announcement on TV with Putin next to him – and the entire government resigned to help 'facilitate' the proposed changes. It was only when Medvedev's successor, an anonymous tax-collector, Mikhail Mishustin, was appointed, that it all started to become clear.

Anyone starting to hope Putin might be relinquishing his grip on the levers of power, in favour of spending more time at his dacha and enjoying the manly pursuits he's famous for, was to be disappointed. Indeed, this was an audaciously disguised power grab for the future. By choosing as prime minister a person with no political standing or base in parliament, Putin was indicating that he does not intend to give up the top job.

What his proposed changes suggest is that Putin is weary of the day-to-day business of running Russia and making all the decisions great and small.

He wants to devolve administrative tasks to a new president and prime minister. By the time his current term ends in 2024, with him in his early 70s, Putin will then in all likelihood take up the role of the grand old man – perhaps the godfather is a more fitting title – of Russian politics.

An electronic screen, installed on the facade of a hotel, shows an image of Russian President Vladimir Putin and a quote from his annual address to the Federal Assembly in Moscow, Russia January 15, 2020

But make no mistake, he will still be all-powerful, the ultimate back seat driver. There are precedents for rulers being seen to step back, but continuing to pull strings from behind the scenes.

In China in the 1980s, Deng Xiaoping stepped back and left day-to-day decisions to his chosen successor, Zhao Ziyang. But when Zhao made the wrong decision in the Tiananmen crisis of 1989 and talked to the student protesters, Deng deposed and replaced him.

And remember, for much of his rule, Stalin was a private citizen, neither prime minister nor president, but as general secretary of the only party in the country he ruled with an iron hand over the institutions of the Soviet Union.

Putin looks through the scope as he shoots a Chukavin sniper rifle (SVC-380) during a visit to the military Patriot Park in Kubinka, outside Moscow, on September 19, 2018

Last year Nursultan Nazarbayev, Putin's close ally in the oil-rich former Soviet republic of Kazakhstan, retired after holding the presidency since 1990. He became head of a 'guiding' security council and, to emphasise he was still in charge, the capital was renamed Nursultan in his honour.

I doubt Moscow will become Putingrad, but Vladimir Putin's influence will be felt by whoever sits in the Kremlin long after 2024. Foreign policy and defence will almost certainly depend on his experience and say-so.

Putin knows that once out of power his former toadies could turn on him and discredit him by revealing dark secrets. He will want to stop that from happening for as long as he can.

So all was not what it seemed yesterday. As long as there is life in him, Vladimir Putin sees Russia's fate intertwined with his own.

Mark Almond is director of the Crisis Research Centre, Oxford