Moscow - Russia will grant Kyrgyzstan hundreds of millions of dollars in aid if the Central Asian nation moves to shut down a US military base crucial to operations in Afghanistan, a Russian business daily reported Tuesday.

Kommersant said Moscow is offering a 300-million-dollar credit over 40 years and a one-time 150-million-dollar state grant as incentives to close the airbase.

Kremlin aide Sergei Prikhodko said that meetings between President Dmitry Medvedev and his Kyrgyz counterpart Kurmanbek Bakiyev in Moscow on Tuesday would also address the impoverished state's 180- million-dollar debt, he was quoted by news agency Interfax as saying.

Bakiyev is facing increasing domestic opposition as the tiny Central Asian state flounders, facing rising unemployment, high debt and the drying up of remittances from its large diaspora in Russia.

"For small Kyrgyzstan, whose yearly budget is 1 million dollars, the proposed total in financial aide is unprecedented," the newspaper wrote.

The Kremlin added that cooperation in the defence and energy sector would be on the agenda for talks between the two countries' leaders Tuesday, but did not comment on the US air base.

The Manas air base, just 30 kilometres from the Kyrgyz capital, was set up in 2001 and serves as a crucial link for US operations in Afghanistan.

While Moscow at the time gave its blessing to the US base, its security relations with Washington suffered severely last year over US missile defence plans and US support for Georgia during a brief war with Russia in August.

Tensions over the US military base, which lies just kilometres from a Russian air base, have also grown as Russian officials seek to maintain influence over the former Soviet states in the region.

Rumours have circulated the past few months that the Kyrgyz government was under pressure to terminate the US lease agreement.

But coming amid hopes of a thaw in US-Russian relations with the new US administration, closure of the base would deal a blow to President Barack Obama, who has named Afghanistan as a top foreign policy priority.

Russia signaled last week it would cooperated with Obama on Afghanistan and allow US and NATO forces supply routes through its southern territory.

Despite Kommersant's report, discussions on the US air base is not on the Kyrgyz parliament's agenda this week, a local deputy was quoted by news agency Ria-Novosti as saying.

"Only the parliament has the authority to terminate the agreement," added the lawmaker, Kabai Karabekov, deputy chairman of the parliament's foreign affairs committee.

The Manas base hosts over 1,000 US military personnel and is rented from Kyrgyzstan for over 18 million dollars a year. (dpa)