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The meeting discussed the North Caucasian counter-terrorist operation and measures to help Chechnya’s transition to peacetime.

Speaking about Chechnya in his opening address, Mr Putin said, “I do not think that there has ever been such an enclave of gangsters who obey no one and nothing, no laws and no regulations”. He added that the republic “has not just fallen out of Russia's legal and governmental orbit… [It] has fallen out of civilization, both Christian and Muslim”.

He stressed that the Russian leadership’s top priority was to stabilise the region and help the Chechen people to restore their own statehood and rebuild their economy.

Mr Putin pointed out the necessity of closely monitoring Chechnya as it rebuilt its infrastructure. He strongly warned against squandering federal budget allocations lest the republic turn into a “black hole” in the Russian budget. Mr Putin told the Cabinet to draft appropriate proposals within the next two weeks.

The meeting approved a resolution to establish an interim Chechen government with a leader appointed by the federal authorities. The republican government would consist of central administrative boards to take control of key regional economic and community issues.

The Security Council also decided to work on practical proposals concerning the revival of Chechen state institutions and the socio-economic sphere.