Vladimir Putin has accused the western media of hypocrisy in its coverage of Pussy Riot saying the women had crossed a red line. The pro-democracy protesters "violated the morals of the people" and after the Stalin-era purge of Orthodox priests it was the Russian state's duty to protect the sanctity of the church, the Russian president added.

Three members of the feminist punk band were sentenced to two years in prison in August after performing an anti-Putin song in a Moscow cathedral. One was released this month.

Referring to a performance carried out by one of the jailed women before Pussy Riot was formed, the Russian president said: "Maybe someone likes to have group sex in a museum. It's an insult to women when a pregnant woman has group sex. Does anybody like it?" Nadezhda Tolokonnikova took part in a group orgy at Moscow's natural history museum to protest the Russian leadership in 2008 as part of a guerrilla art group called Voina.

Speaking to the Valdai group of foreign and Russian academics and journalists, Putin said the western media was hypocritical in condemning the imprisonment of the three women, when they were silent about the fact that the man who made "Innocence of Muslims", Nakoula Basseley Nakoula, was also in jail.

Nakoula is the Egyptian-born US resident thought to be a writer, producer, and promoter that sparked riots and protests erupted in many countries around the world – and particularly in Islamic countries. He is being held in the United States and faces up to three years in prison for alleged parole violations.

Putin also equated the Pussy Riot affair with the work of Russian neo-fascist groups that put posters in supermarkets and malls calling for the expulsion of Jews and foreign workers.

"They too should be convicted of social unrest. Do you really want to support such behaviour? Then why don't you support the man who is in prison and who made that movie?"

He was asked if the years of stability under his regime was in danger of turning into stagnation. In reply Putin listed the achievements of his first two terms of office, saying that average wages were six times greater than when he took over and that national debt was minimal.

Commenting on the protests that have shaken Russia since he announced his intention to return to the presidency, Putin said: "We changed our election system as a result of the protests, introduced direct democratic elections of governors and will so the same with senators in the upper house." Critics have said a recent decision to resume gubernatorial elections, a practice abolished by Putin in 2004, is meaningless because of the existence of a so-called presidential "filter" for candidates.

"About the opposition, I don't know. I believe the response of those in power should be to involve more and more people," Putin said. "The most important thing is not retaining power but making government more efficient. The work should be united and serious. If we can do that our citizens will appreciate that."

Commenting on state-run oil major Rosneft's recently announced takeover of Tnk-BP, Putin said he had "mixed feelings" about the deal.

Rosneft is expected to entirely take over the oil company in the next six months, after buying out BP's 50 per cent share this week and announcing a deal to buy out the remaining 50 per cent held by a consortium of Russian oligarchs.

"The government and I had mixed feelings when this project came up," Putin said. "The fact that a company with state participation was increasing its market share at the expense of its foreign partner was a minus."

Putin oversaw a vast campaign to re-nationalise some of Russia's main oil and gas assets during his first two terms as president. Rosneft, headed by his close ally Igor Sechin, was a middling oil company until it bought the main assets of Yukos at knockdown prices in a series of bankruptcy auctions held following the arrest of the company's CEO, Mikhail Khodorkovsky, in 2003. Khodorkovsky, who was found guilty of economic crimes and is serving his sentence in a remote northern prison, accused Sechin of orchestrating the campaign against him.

The Tnk-BP deal is due to make Rosneft the world's largest listed oil company. Putin said his blessing of the deal was prompted by a desire to dispense of the years-long shareholder conflict inside the company, even though it ran counter to supposed efforts to constrain the state's role in the economy.

"We tried not to get involved but when BP managers came to me and the government and said we want to cooperate with Rosneft we could not say no," Putin said. "We had a difficult choice. In the end we have agreed with the proposal of Rosneft and BP that they will work together."