President Barack Obama has told east European states he was backing away from plans for an anti-missile shield there, in a move that may ease Russian-U.S. ties but fuel fears of resurgent Kremlin influence.

Poland said Obama would announce a final decision on the project, a major source of tension between Washington and Moscow, later on Thursday.

The shield, involving interceptor missiles in Poland and a radar complex in the Czech republic, was promoted by Obama's predecessor George W. Bush to defend against any missile launches from rogue states such as Iran and North Korea.

Today, shortly after midnight, Barack Obama telephoned me to announce that his government is backing away from the intention of building a missile defense radar on Czech territory, Czech Prime Minister Jan Fischer told reporters.

The Czech Republic acknowledges the decision.

A senior Polish source close to the negotiations told Reuters Warsaw had received a similar message. We will not have the interceptors for now.

The Obama administration seeks to reset battered ties with Russia so that the two former Cold War foes can cooperate on Iran, on fighting Taliban insurgents in Afghanistan and on reducing their vast arsenals of nuclear weapons.

Russia is allowing the United States to move trains carrying supplies for U.S. forces across the country via Central Asia to Afghanistan, avoiding routes through Pakistan that had come under frequent attack from the Taliban.

Washington is also seeking Russian support in economic sanctions against Tehran, which it accuses of developing nuclear weapons.

Diplomats in Moscow say Russian hardliners could read the shield backdown as a sign of U.S. weakness. Far from doing the bidding of the United States, they may instead press for further gains to shore up Russian power in the former Soviet bloc.

Eastern European states, especially Poland and the Baltic states, saw the missile plan as a symbol of U.S. commitment to the defense of the region against any encroachment by former Soviet masters 20 years after the collapse of communist rule.


Some east Europeans see Russia's brief war with Georgia last year and confrontations with Ukraine over gas supplies as symptoms of a Russian 'neo-imperialism' driven by a view of eastern Europe as belonging to Moscow's sphere of influence.

This would be very bad, said Witold Waszczykowski, deputy head of Poland's National Security Bureau which advises President Lech Kaczynski. Without the shield we would de facto be losing a strategic alliance with Washington.

Ignoring U.S. assurances that the system was not targeted at Russia, President Dmitry Medvedev threatened last year to station missiles in a Russian enclave near Poland if the United States implemented the plan.

For Poland, the timing of the announcement is particularly sensitive. Thursday marked the 70th anniversary of the Soviet invasion of eastern Poland following a pact between Moscow and Nazi Germany, an event seen by Poles as a stab in the back.

I hope this is just a coincidence, said Waszczykowski.

The Wall Street Journal said Obama had made the decision because Iran's long-range missile programme has not progressed as rapidly as previously estimated.

The West is also concerned about Iran's nuclear research programme, which it believes is a cover for development of an atomic bomb. The Islamic Republic says it wants to use nuclear technology only for power generation and to allow it to export more oil and gas for foreign currency.

The shield project has proved costly. Democrats on the House Armed Services Committee voted in June voted to reduce planned missile interceptor silos in Alaska.

Last month, a U.S. Government Accountability Office (GAO) report said shortcomings in plans for sites in Poland and the Czech Republic would greatly increase costs. The GAO said the 7-year-old Missile Defense Agency had spent $56 billion to develop and field an initial ballistic missile defense system and planned to spend $50 billion more in the next 5 years.

(Additional reporting by Jan Lopatka in Prague, Conor Sweeney in Moscow, Mohammad Zargham in Washington and Ross Colvin in Baghdad; Writing by Guy Faulconbridge and Michael Stott; Editing by Ralph Boulton)