LAHTI (Finland), Oct 20: European Union leaders held talks with President Vladimir Putin on Friday, attempting to secure guarantees over energy supplies but promising to bring up the issue of Russia's human rights record.

The EU aimed to press Russia to open up its energy domestic market and applying more transparent rules for companies, the EU's Finnish presidency said.

"We aim to build a close and legally binding partnership (with Russia) based on mutually balanced long-term benefits," said Finnish Prime Minister Matti Vanhanen, speaking for the EU presidency.

Member states have agreed that the partnership should be based on principles set out in the EU Energy Charter, Vanhanen said, referring to a treaty proposal that Russia has declined to ratify.

"They should cover especially private market-based rules, market opening, non-discriminatory access to the transit network and for mutuality in two-way investments," he added.

Many of these conditions have been rejected by Russia because the Kremlin wants to protect the gas monopoly of Russian giant Gazprom and has sought recently to exclude foreign investors from its strategic energy sector.

European Commission President Jose Manuel Barroso said: "We need to have some sound principles, like reciprocity, transparency and market opening. All partners should have respect for energy security in the long term."

Barroso also warned against over-politicising the EU-Russia energy debate. “It is a mistake, the over-politicisation of the debate on energy. We are not trying to have a politics of energy."

Most major capitals have till now dealt with Russia over energy on a bilateral basis.

Despite some member states' strong interest in talking about energy, Vanhanen said that he saw no problem in talking about Russia's treatment of Georgians and the murder of Russian journalist Anna Politkovskaya.

"We can't exchange human rights for energy production," assured European

Parliament President Josep Borrell said.

British Prime Minister Tony Blair and French President Jacques Chirac appeared content to concentrate on the economic aspects of the relationship with Russia.

"It is important that if we have a business relationship based on energy that it is business considerations and not political considerations that are coming into it, Blair said.

Russia is the world's second biggest oil producer after Saudi Arabia and supplier of around a quarter of all oil and natural gas consumed in the European Union.

Moscow's recent hard-nosed approach to foreign energy investors has shaken its European partners, who are eager for a more balanced cooperation on energy issues.

In particular, the Europeans are concerned about Russia's recent decision to develop the huge Shtokman gas field without foreign partners and threats to halt, on environmental grounds, a project off Russia's Pacific coast run by Anglo-Dutch energy giant Shell.

Those incidents came after Russian giant Gazprom switched off the gas taps to Ukraine in January amid a price war, hitting some supplies to Europe and awakening the EU to the power of energy as a foreign policy tool.

EU foreign policy chief Javier Solana said that an agreement would be signed with Ukraine and Russia in the coming days.—AFP