Despite sharp differences over Chechnyna, Russian President Vladimir Putin has pledged to seek closer ties with the West and implement economic reforms to attract investment.
"Despite what has happened in the North Caucasuses, one would like Western opinion to have greater trust in Russian opinion," Putin said, referring to Chechnya during a 24-hour trip to London, his first visit to the West since becoming president.
Critics charged that the visit by Putin, who also met the Queen at Windsor Castle before returning home was inappropriate and premature because of the conflict in Chechnya.
Some 50 protesters waved Chechen flags and chanted slogans as the Russian leader's bulletproof limousine swept up to Blair's 10 Downing Street residence, where he held talks and had lunch.
During an earlier meeting with British business leaders, Putin acknowledged that Russian instability had put off investors, but maintained he was determined to proceed with reforms.
"Russia is not a shortened map of the ex-Soviet Union, it is a country which has tremendous self-confidence, a self-confidence based not only on our experience of reform but on errors we have committed," Putin told the Confederation of British Industry.
"We have tried to learn the lesson, and during the last years we have learned how to distinguish real opportunities from superficial opportunities," he said.
Putin, a longtime KGB agent who never held elected office until last month's presidential vote, stressed repeatedly during his public pronouncements in Britain that Russia's future lay with Europe.
He also laid a wreath at the Tomb of the Unknown Soldier, a regular engagement for visiting heads of state.
On nuclear co-operation, he lauded the ratification by the Russian Parliament, the Duma, of the START II treaty and said he had also discussed U.S. missile deployments with Blair.
Putin's predecessor, Boris Yeltsin, had repeatedly failed to win approval for the nuclear arms reduction agreement.
Blair, who visited St. Petersburg in March, was the first Western leader Putin met after becoming acting president. Blair, who at 46 is one year younger than Putin, left impressed by his energy and ambitions for Russia, aides said.
Putin hinted that Finance Minister Mikhail Kasyanov would "likely" be appointed the new prime minister after his May 7 inauguration, according to the Russian agency, Prime-Tass.
Kasyanov, who also is first deputy prime minister, is seeking to convince creditor nations to write off about a third of Russia's $31.8 bn Soviet-era debt.