"Russia's Putin keeps his Kremlin chair"

Putin paused before sitting down and told President Medvedev: "Now this is your place," Reuters quoted Russia's Kommersant daily.

"Oh, what's the difference?" Medvedev answered and immediately sat on the right of the desk, where Putin's guests traditionally perched for the eight years of his presidency.

A photograph of the two leaders published on the Kremlin's website showed them smiling at the start of the meeting. In the footage, Putin was shown seated on the same side of a table that he always occupied as president, while Medvedev, technically his new boss, occupied the side traditionally kept for subordinates.

Key Russian ministers kept their jobs and influential former Kremlin aides were given cabinet posts on Monday in a government shake-up under the new Prime Minister Putin.

Finance Minister Alexei Kudrin, Foreign Minister Sergei Lavrov and Defence Minister Anatoly Serdyukov all remained in their posts, Putin said on national television after meeting with President Dmitry Medvedev.

The shake-up demonstrated Putin's stamp on government less than a week after he ended his eight-year presidency, handed over to Medvedev, and became prime minister.

"Putin's team is still in charge," Moscow-based political analyst Boris Makarenko told AFP.

Viktor Zubkov, who had been prime minister under Putin, now becomes first deputy premier, as does one of Putin's main policy advisors, Igor Shuvalov.

In an intriguing shift, two powerful but shadowy figures from Putin's former Kremlin administration were brought from their previous backroom jobs into the cabinet.

Igor Sechin, who had served as deputy head of the Kremlin administration and is also head of the oil giant Rosneft, is to become a deputy prime minister. Sechin was widely seen as a hardliner in Putin's entourage and one of the architects of the controversial legal assault against oil company, Yukos and its now imprisoned founder Mikhail Khodorkovsky.

Sergei Sobyanin, who was head of the Kremlin administration, becomes a deputy premier and government chief of staff.

In another sign of Putin's strong grip on Medvedev, the new presidential administration head is to be Sergei Naryshkin, an influential Putin ally believed to have a background in the Soviet-era KGB. As head of administration he will have control in the preparation of presidential decrees.

Nikolai Patrushev, head of the powerful FSB national security agency, successor to the feared KGB, moved over to the Kremlin Security Council. The new FSB chief will be the little-known Alexander Bortnikov.

Sergei Ivanov, another KGB veteran who until last year was widely seen as the sole rival to Medvedev for replacing Putin in the presidency, was demoted from first deputy premier to simple deputy.

Medvedev's chief aides were also all drawn from Putin's camp, including Alexei Gromov -- Putin's former spokesman -- who will deal with the press.

The shake-up was announced after Putin, who is another KGB veteran, and Medvedev held their first working meeting. Footage on national television showed the two seated across a table, although it was not immediately clear where the meeting took place.

Medvedev, a soft-spoken lawyer and longtime Putin aide, has kept a low profile since being sworn-in on Wednesday and has made only limited appearances on Russia's heavily censored national television channels.

Monday's government announcement reinforced the image of Putin as a prime minister with exceptionally high authority -- and Medvedev as an unassertive president.

Medvedev's decree made the cabinet changes law, but that was only clear to political insiders and journalists following Kremlin announcements. The all-important television news was dominated by Putin, who appeared at length to read out the list of changes.

Since becoming Russia's third president since the Soviet collapse Medvedev has made two brief speeches -- one at his inauguration and another at a Victory Day parade on Friday. Putin made a major policy speech to parliament on Thursday when he was confirmed as premier.