Transcript of the start of the meeting:

Vladimir Putin: Mr Mutko, the summer holidays are approaching. Children will also be on holiday. Though this is mostly a matter for the Ministry of Healthcare and Social Development, your department also has a direct involvement in it. You organise competitions for children and young people and prepare sports grounds. You have several programmes that aren't bad, including the construction of sports and recreation centres and the preparation and construction of new football pitches. How is work progressing?

Vitaly Mutko: Overall it is going well. With your support, we retained almost all our financing; even after cutting expenditures we have retained practically the entire programme.

This year we are planning to bring 159 public sports sites into use. We have changed our approach somewhat in this area, sharing programmes such as the construction of regional and municipal physical fitness and sports centres with the governors.

Take the Ryazan region as an example. There are 23 municipal districts there and a population of 50,000-70,000. Sports and recreation centres are being built in populated areas such as Rybnoe, for example, where such a centre is already functioning, and has many facilities: there will be a fully-equipped sports hall there, as well as a swimming pool. There are 12-15 schools in the area, and all these schools will be able to use the centre for physical training and sport.

This year we are also holding a competition to find the best sports centre for physical fitness and sport. Our first project will see 159 such sites up and running this year alone. They are being co-financed by the regions - we are giving subsidies, and the regions are putting in about 50%. We are trying to even out the situation across all the regions of our country. That is the first point.

Secondly, last year you supported our football pitch building project, which is an addition to our programme. This year we will be introducing 70 football pitches for children's schools in order to develop the popularity of physical fitness and sport. These new pitches will be made of artificial grass. We will build the first of these virtually all-weather pitches for the regions of the Far East, Eastern Siberia, and the Urals.

We are trying to ensure that all these pitches are domestically produced. A factory has been built in the Moscow region that produces surfacing for these football pitches.

Vladimir Putin: Are they standardised? Will it be posisble to hold matches on them?

Vitaly Mutko: Yes, they're standardised for every level, in compliance with the two-tier, or two-star, system. That's one of FIFA's requirements. Matches can be played on them.

As a rule, the stadiums are municipal, with a capacity of about 1,500 thousand seated spectators, and a multi-purpose hall.

The first major training ground will also be commissioned as part of this programme. We decided to locate it in Novosibirsk, in order to give children the opportunity for year-round sports activities in addition to football. Such training grounds will also be outfitted out with running lanes for track and field events.

We will build seven of these grounds by 2015, in cities such as Novosibirsk, Tomsk, Yekaterinburg, where popular sport is being developed on a mass scale.

This concludes my summary of the state of popular sport development.

Now, regarding competitions. As you know, we have been developing the Youth Games since 2003. This year, the Winter Youth Games were held to high standards. I would like to ask you to meet the medalists of the Youth Games, as the majority of these children will go on to represent Russia in the 2014 Winter Olympics.

Vladimir Putin: I will definitely meet them.

Vitaly Mutko: And of course there are the Summer Youth Games. They will be held once every two years, and this summer the Summer Games will take place in Penza in August for those involved in 25 types of sport. The event will take place during the school summer holidays and will showcase our talent. This is where we are in terms of sporting competitions.

We also decided on regular support for sport in schools, including mini-football. This project currently involves 53 regions, each comprising four teams of girls and four teams of boys competing class against class, school against school.

Vladimir Putin: That's what we were talking about at our previous meetings.

Vitaly Mutko: Exactly, two years ago. We set a target for ourselves in four sports. Football is practically fully completed. Representatives from 53 regions took part in the project this year. All in all 60,000 schools, with 13 million school children, are involved in our projects, that is 50% of schools are taking part.

The finals have already been held in the Moscow Region. About 1,500 schoolchildren took part, and the winners will be given a present - their school will receive a stadium of its own. We build such stadiums on a turnkey basis.

Vladimir Putin: Excellent. And how do our leading sport clubs feel? I mean, in terms of any financial difficulties?

Vitaly Mutko: Of course, clubs and team sports at the professional level, such as football, basketball, volleyball, are all experiencing difficulties due to a steep decline in sponsorship. Today it is harder to provide maintenance for a team. On the other hand, it gives us the opportunity to put things in order. For example, the number of legionaries can be reduced. The number of large-scale purchases can be cut. We are trying to pay more attention to our own young promising players. And above all, of course, we are streamlining our expenditures. The clubs that have the best chances to survive are naturally those that have good relationships with their regions, have their own schools, and have regional support. These professional clubs lead the way for popular sport for our children. Certainly, there are some problems involved.

The continental hockey league championships are drawing to a close. This year went quite successfully, at a high level. As you know, the national team is now almost fully comprised of domestic players who play here in Russia, in our continental league, with the exception of several league players from the National Hockey League.

Vladimir Putin: And how are our players doing?

Vitaly Mutko: Our players are playing very well in our championships. The same thing is happening in football as well - this year the number of western players grew by 30%, and the quality of Russian players is already improving. The quotas are already working. Hence, not without difficulties, but overall there have been no major dismissals from any kind of sporting championship.

Vladimir Putin: We've spoken about the possibility of indicating our willingness to host the major football events, the European Championship and the World Cup. When are these competitions due to take place?

Vitaly Mutko: The next World Cups, about which the decisions are due to be made, will be in 2018 and 2022. FIFA has already opened the period during which bids to host it should be made. UEFA has not done the same for the European Championship, which will be in 2020. The number of teams participating in the European Championship will be increased from 16 to 24. The earliest opportunity to put a bid in to host the World Cup is for 2018 and 2022, and it is too early to bid for 2020.

This of course requires a very serious bid, supported by the Russian Government. It requires a minimum of 10 cities, which means 10 stadiums with a seating capacity of 40,000, and of course the integrated development of these 10-12 cities, as a minimum in the following five areas: airport, transport infrastructure, hotels, security, and medicine. This would give these 10-12 cities the overall opportunity for comprehensive development and would of course significantly boost Russia as a tourist destination. We have worked on this possibility.

Vladimir Putin: Holding the championship in Russia would in effect allow us to develop the infrastructure of these 10 cities as we are currently developing Sochi's.

Vitaly Mutko: Yes, if you take Sochi as an example, 80% of the investment there is currently going into developing the city's infrastructure, which means the sewage works, roads, and engineering. The same would of course be needed not in one city, but in ten, and would allow us to push these cities forward significantly. We would propose the cities, and would split the country into four groups of cities.

Vladimir Putin: What cities are they?

Vitaly Mutko: Above all, the southern region. There is Sochi itself, since everything there will be ready, including the stadium. There's Krasnodar, a major city, where, and this is most important, there is a football club that plays in the premier league. There's Rostov, also a major city, where the local stadiums are being rebuilt.

Next is the central region, that is, Moscow and the Moscow Region. Here we have the Luzhniki Stadium, and it would be possible to build one more stadium in both Moscow and the Moscow Region. There is St Petersburg, where a stadium is being built and should be completed by the end of 2011 or early 2012. Then there are those cities in Russia's middle belt, like, for example, Yaroslavl, which is getting ready to celebrate its 1000th anniversary, and where a stadium is being built. There is Kazan, where preparations for the 2013 University Games are underway, and where the relevant infrastructure is being developed. And there are a number of cities from which we could choose another one or two: Samara, Volgograd, Saransk, and Yekaterinburg.

Vladimir Putin: Mr Mutko, I would ask you to prepare our bid to play host to the 2018 Football World Cup in Russia.

Vitaly Mutko: Very well.

Vladimir Putin: Irrespective of the decision on the venue for the championship, all the programmes that we have spoken about, and those we did not mention - you know all about our plans to build major new stadiums, including those in the cities you have just mentioned - must in any case go ahead.

Vitaly Mutko: Yes, Mr Prime Minister.