Bush says he will not dilute his policies when in office

The US is likely to make its aid to Russia more conditional on real economic reforms which guarantee the safety of foreign capital, the President-elect, Mr George Bush, hinted yesterday.

In a major interview with the New York Times, Mr Bush also reiterated his commitment to getting US troops out of Kosovo and bluntly refused to consider watering down his controversial tax-cutting programme.

And he strongly defended his nominations of controversial Cabinet members. Referring to his nominee as Interior Secretary, Ms Gail Norton, and her desire to see drilling for oil in the Arctic National Park, he said: "People shouldn't be shocked that I am picking someone who agrees with me. That's what presidents do."

Mr Bush warned the Russians that "they have to decide whether or not it is a . . . welcoming place for our capital. They have to make the decisions on matters of real law and sound accounting principles. They have to assure capital that it is a safe haven. That you can get a reasonable rate of return. That's up to Russia."

US aid, amounting to $2.3 billion since 1992, has in any case tailed off significantly since the financial crisis of 1998. The IMF and World Bank in which the US is the largest shareholder have issued loans of about $30 billion in the same period.

The effect of Mr Bush's reappraisal of the US Russia strategy is thus more likely to be one of tone than substance, moving from critical engagement to a more confrontational stance. It is likely, however, to strengthen nationalists in Russia who resent what they see as US bullying and may mark a significant political move away from more engaged European partners.

Mr Bush also made clear his commitment to a new National Missile Defence programme, arguing that Russia and China should not fear such a development as a threat to the strategic balance. Using an argument that seemed to admit the scientific weakness of the whole project, he said that both countries "know that there will be no system developed in the immediate or forseeable future . . . that can conceivably intercept a multiple launch regime." The NMD, he argued, was tailored to deal with rogue states like Iran.

On the withdrawal of US forces from Kosovo, Mr Bush said he intended to make clear to European allies "that we'd like them to be the peacekeepers" but insisted that "it's going to take a time, and I know that."

Domestically, he promised a rigorous review of all President Clinton's last-minute initiatives, particularly those involving the protection of huge swathes of wilderness. "We've got lawyers looking at every single issue, every single opportunity" to reverse actions, he said.

Was there room for compromise on his controversial $1.6 trillion tax cuts programme? "The answer is no. I think it's the right number," he said.

The President-elect suggested he would revert to the Reagan policy of blocking US support to international family planning groups which provided or encouraged abortion. "Organisations that support abortion are organisations I do not want to support," he said.

Meanwhile, the former president, Mr Ronald Reagan, is recovering in hospital after "successful" surgery to repair a fractured right hip, his doctor said.

The operation on Mr Reagan, who turns 90 next month, was performed early on Saturday after he broke his hip the previous evening in a fall at his home in the Los Angeles suburb of Bel Air.

"He's doing well, we're happy," Dr Kevin Ehrhart told a news conference. He added, however: "It's a serious injury" and his prognosis was "guarded".

"He's a patient [who is] 90 years old with other medical problems," Dr Ehrhart said.

Mr Reagan, who suffers from Alzheimer's, was admitted to St John's Health Center in Santa Monica, just west of Los Angeles, late on Friday.

Mr Reagan, president from 1981 to 1989, retreated from public life after revealing in November 1994 that he was suffering from Alzheimer's disease, and has been living in seclusion.

Mr Reagan's wife Nancy has been at his side since his accident, Dr. Erhart added.