Moscow/Tolyatti, Russia - Russia will allocate over 20 billion rubles (589 million dollars) to support the country's largest automaker AvtoVAZ, Prime Minister Vladimir Putin said Monday.

He said the funds should allow the company to attract another 90 billion rubles (6.64 billion dollars).

Putin was shown on state television dressed casually in a black sweater and suit addressing workers at AvtoVAZ's Volga river manufacturing base in Tolyatti, about 750 kilometres east of Moscow.

"We came here to decide this question. It is a question of directly allocating money, so the company can resolve its debts to suppliers," Putin told workers.

"We are discussing a figure that is higher than 20 billion rubles."

A final decision would be reached by the end of the day on the size of state support, Putin said, while AvtoVAZ shares surged on the news.

The company's management had asked for 26 billion rubles (765 million dollars) in state aid.

Despite a 500-million-dollar state bailout late last year, the automaker's production line has remained mostly shut since February amid a dispute with parts suppliers, who analysts say are no longer accepting the promissory notes AvtoVAZ had used for payment.

The legendary maker of the Lada had once dominated the Soviet car industry, but has struggled to compete with the influx of foreign cars on the market.

Renault bought a 25 per cent stake in AvtoVAZ last spring when Russia had promised to be the fastest-growing market for cars. (dpa)