Barack Obama today reversed almost a decade of Pentagon strategy in Europe, scrapping plans to deploy key elements of a US missile defence shield.

Instead, he said, a more flexible defence would be introduced, allowing for a more effective response to any threat from Iranian missiles.

The U-turn is arguably the most concrete shift in foreign policy from that of the Bush administration, which spent years negotiating to place silos and interceptor missiles in Poland, and a radar complex in the Czech Republic.

The shift is a triumph for the Kremlin, which has long and vehemently argued that the shield is aimed at neutralising its intercontinental missiles; Moscow had warned of a return to a cold war arms race, and threatened to deploy nuclear missiles in its Kaliningrad exclave, surrounded by EU states.

President Dmitry Medvedev described today's announcement as a "responsible move ... We value the US president's responsible approach towards implementing our agreements," he said. "I am ready to continue the dialogue."

However, the US decision now puts the onus on Moscow to respond in kind by cooperating with the White House on the Iranian nuclear programme, on Afghanistan, and on nuclear arms control.

At a hastily arranged press conference at the White House after news of the switch leaked overnight, Obama said the aim was to protect against the threat of an Iranian missile attack. He said the Bush plan had intended to intercept long-range Iranian missiles, but US intelligence now showed the danger was short and medium range.

The new system would be more flexible and spread across various countries, Obama said. "It deploys capabilities that are proven and cost effective, and it sustains and builds upon our commitment to protect the US homeland," he said.

The shift could potentially see a more aggressive approach to Iran, with US military deployment shifting from central Europe to right up to the Iranian border. The plan envisages sea-borne missiles in place close to Iran by 2011.

The decision was welcomed among Nato allies in western Europe, which had viewed the earlier project as an unnecessary provocation to the Russians. But some in Poland and the Czech Republic will view it as a betrayal of efforts over the years to accommodate US requests in the face of domestic opposition. Former Czech prime minister Mirek Topolanek, whose government signed the original deal, described Obama's decision as bad news. "This has two dimensions. The first is a certain softer position of the US in negotiating with Russia. And the second, that is bad news, they used the opportunity when this country is unstable, when it is behaving in a very untraditional and unstable way, and ended co-operation on a matter that the Obama administration considered unacceptable," he said.

The Iranian foreign ministry declined to comment on Obama's move, but senior Iranian figures rejected the idea that their country was a threat to the region.

Kazem Jalali, spokesman for the parliamentary committee on national security and foreign policy, said "considering Iran as a threat has been a wrong policy since the beginning".

In Washington, Republicans condemned the U-turn, which came at the end of a 60-day review. Republican Senate leader Mitch McConnell described it as "both shortsighted and harmful to our long-term security interests".

He added: "Further, the administration has secured no apparent commitment from the Russians to work with us to reduce either the missile or nuclear threat from Iran."

Robert Gates, the defence secretary, who served in the post under Bush and had previously been an advocate for the Poland and Czech deployment, denied that the move amounted to appeasement of Russia. The decision was taken on the grounds of new intelligence, cost and technical feasibility, he said.

The White House said that US intelligence on Iran indicated that "the threat from Iran's short- and medium-range ballistic missiles is developing more rapidly than previously projected, while the threat of potential Iranian intercontinental ballistic missile capabilities has been slower to develop than previously estimated".

In spite of Gates's denial that Moscow was a factor, there were indications Russian sensitivities played a part.

The new plan would see a fixed radar system in the Caucusus aimed at Iran, rather than an omni-directional one in the Czech Republic, according to a Pentagon general.

David Albright, a US expert on proliferation, described Obama's announcement as a good move, saying that the Bush plan had been "over the top" while the new one was more relevant to the perceived Iranian threat.

In Warsaw, Polish prime minister Donald Tusk said Obama had assured him in a phone call that the change would not hurt the security of Poland or Europe. "I would not describe what is going on today as a defeat for Poland," Tusk said.