Vladimir Putin has tamed the gangster capitalism which accompanied the collapse of the Soviet Union to make Russian corruption normal and civilised, his presidential election campaign chief said in an interview published on Friday.

Russia is ranked as the most corrupt major power and in leaked documents U.S. diplomats cast alpha-dog Putin as ruling a corrupt autocracy that allows crooked officials and spies to siphon off cash from the world's biggest energy producer.

Currently serving as prime minister, Putin is campaigning in a presidential election that will extend his rule to 2018 with promises for tougher measures to fight corruption.

He once dismissed a journalist's speculation about his personal wealth as snot smeared over paper.

When asked about the perception of corruption, Putin's election campaign chief, film director Stanislav Govorukhin, said that corruption had existed for centuries in Russia and that Putin had managed to tame the excesses of the 1990s.

Putin didn't give birth to it. Corruption existed in tsarist Russia, said Govorukhin, 75, who is best known for his cult 1979 Soviet film, The Meeting Place Cannot Be Changed, about the hunt for a gang of robbers.

In the 1990s, there was no corruption. Instead it was a thieving outrage, open plunder. Billions were stolen, factories and whole sectors. They destroyed and stole, they ground Russia into dust, he told the Trud daily newspaper.

Today we have returned to 'normal', 'civilised' corruption which, alas, there is in China though they shoot them there and in Italy and in America, he said. We are dragging ourselves out of the thieving outrage.

While the comments appear to be an attempt to address widespread concerns about corruption by reminding Russia's voters about the chaos of the 1990s, they also underscore how acceptable graft has become for the Russian elite.

Russia is ranked as the most corrupt country in the Group of 20 by anti-corruption campaign group Transparency International, though in 2011 it rose to 143rd place in the 183-country index, beside Nigeria and Uganda, from 154th place in 2010.

CIVILISED CORRUPTION

Corruption, which plagued tsars and communist general secretaries for centuries, reached vast proportions as the Soviet Union collapsed in 1991 and is now a way of life for many Russians, from small bribes paid routinely to traffic police to multi-million dollar kickbacks for officials who hold sway over the $2.1 trillion economy

He is right in that corruption has become more organised. I think that is what he means with the word normal, and that it is more civilised, if he means it is carried out by people wearing very good suits, said Yelena Panfilova, head of the Moscow office of Tranparency International.

The worst corruption in Russia now happens not on the street but quietly in very civilised offices and is carried out by people in very good suits. So in a purely visual sense, it looks more respectable but that doesn't make it less terrible and less damaging for the country, said Panfilova.

Govorukhin, who said corruption did not exist under Soviet leader Josef Stalin, argued penalties for corruption should be increased, suggesting the confiscation of property for those convicted of corruption offences.

Under Stalin, by the way, there was no corruption. It blossomed only in the last years of the Soviet Union, he said.

Putin, he said, would win in the first round of the presidential election.

Western executives say the biggest barriers for business in Russia are alarming levels of official corruption, mounds of red tape and the arbitrary rule of law.

Perceptions of corruption have also undermined Putin's authority among the urban youth. At the biggest protests of his 12-year rule, opponents chanted Putin is a thief and his ruling party was cast as the party of swindlers and thieves in the December 4 parliamentary election.

OLIGARCH TAX?

Putin, 59, was clearly taken aback by the scale of the protests against alleged vote rigging in the parliamentary election, initially dismissing opponents as the pawns of the West and even branding them chattering monkeys.

But as the seriousness of the challenge became evident, Russia's most popular politician changed tack, reshuffling his team, promising gradual reform and underlining his self-cast role as the father of Russian stability.

Speaking to Russia's richest men on Thursday, Putin sought to use the ghosts of the rigged state asset sales of the 1990s to underline his reputation as the slayer of oligarchs since the 2003 arrest of Mikhail Khodorkovsky, then Russia's wealthiest man. Khodorkovsky is still in jail.

The rigged sales under Boris Yeltsin are still immensely controversial as they made a tiny group of savvy businessmen - known as oligarchs - fabulous fortunes while ordinary Russians were thrown into poverty.

We need to close the period of the '90s, of what, speaking honestly, was dishonest privatisation, Putin said in a speech to the Russian Federation of Industrialists and Entrepreneurs (RSPP), a big business group known as 'the oligarchs' union' which controls two thirds of the Russian economy.

This should be a one-off contribution, or something like that. We should think about something like that.

(Reporting By Guy Faulconbridge)