*boosts arms spending to replace Georgia losses

Accession of Russia's neighbours Ukraine and Georgia to NATO could lead to deployment of tactical nuclear weapons on their territory and trigger a new arms race, the Kremlin's security chief said in an interview.

Security Council chief Nikolai Patrushev said in an interview with Izvestia daily, to be published on Thursday, that Washington and NATO sought to achieve military and strategic supremacy over Russia by extending the alliance's borders. "Georgia and especially Ukraine in case of their accession to the alliance can become a convenient springboard for deployment of large ground, air and naval strike forces armed with high-precision and tactical nuclear weapons," he said.

"Potential deployment of such weapons in Ukraine will make them strategic, because their destruction zone will cover critically important military and economic objects in European Russia, with elements of state governance and military command," Patrushev said. "Such actions by the Americans can aggravate mutual mistrust and spiral (into) an arms race to which we do not aspire, I want to stress."

At a summit in Bucharest in April, NATO members turned down requests from former Soviet republics Georgia and Ukraine to be granted a Membership Action Plan, which would have set them on the road to membership. But they held open the possibility of future entry.

Patrushev, a long-term ally of powerful Prime Minister Vladimir Putin and former FSB secret service chief, also warned that a possible US strike on Iran from Georgian land would lead to "additional threats to Russia's national security".

Defence spending

Meanwhile, Russian Prime Minister Vladimir Putin said on Wednesday the government would allot an extra 80 billion roubles ($3.13 billion) next year to buy new weapons and partly offset Moscow's losses during a brief war in Georgia. The figure gives a clue as to how much the August conflict may have cost Russia's budget coffers. Senior Russian officials had earlier ducked the question.

"The Caucasus events once again demonstrated the importance of our work on strengthening the combat-readiness of armed forces," Putin told a government meeting. "It is envisaged to allot an additional 80 billion roubles to purchase new military equipment and weapons and to deploy our troops where we consider it expedient to do so." "The talk is also about partial compensation of the losses caused by military actions in the Caucasus and ... the purchase of new equipment. These losses must be offset by ... new capabilities of our defense industry."