"I think the time has come for Russia, given the growth in our financial capabilities, to make its contribution in this sphere as well", he added.

President Putin's personal envoy for relations with the 27-nation EU, Sergei Yastrzhembsky, explained Moscow's intentions further.

"This is not going to be a joint venture," Mr Yastrzhembsky said, underlining "the institute will be monitoring the situation in Europe concerning rights of ethnic minorities, immigrants, media and such".

There was apparent confusion around the content of the Russian idea, with Portugal's prime minister Jose Socrates saying "we received president Putin's proposal of a Euro-Russian institute dedicated to promoting human rights in the two blocs [Europe and Russia] with satisfaction".

Mr Socrates, as host of the event, hailed the meeting as "constructive" and said it led to "significant steps toward building a deeper relationship between the EU and Russia" but there was little agreement on substantive issues.

The two sides were unable to bridge their differences on the future status of Kosovo – the breakaway Serb province, with Russia continuing to take a pro-Serb line on the issue having earlier this year blocked a UN plan granting substantial independence for the province.

In addition, talks on a new partnership deal between the two sides were not kicked off, even though the current Partnership and Cooperation Agreement (PCA) expires at the end of this year.

The PCA will be automatically renewed until Brussels and Moscow agree on a new one, with EU external relations commissioner Benita Ferrero-Waldner saying on Friday that a new agreement is probably only on the cards after Russia's parliamentary and presidential elections in December this year and March 2008 respectively.

Talks on a new agreement have been blocked since late 2005 when Poland vetoed the opening of discussions because of a bilateral dispute between Warsaw and Moscow concerning meat imports.

There was also no major breakthrough in the field of energy co-operation, a contentious issue for Europe which is heavily reliant on Russia for gas and oil supplies.

Both sides agreed "to keep working to develop a mechanism for early warning on [potential problems with] supplies of energy from Russia to the EU and demand for it", Russian president Vladimir Putin was quoted as saying by Interfax.

Mr Putin also reiterated his opposition to US plans to deploy missile shields in Poland and the Czech Republic, recalling "how relations were developing in an analogous situation in the middle of the 1960s".

"Analogous actions by the Soviet Union when it deployed rockets on Cuba provoked the Cuban missile crisis", he said.