MOSCOW - Dmitry Medvedev, the odds-on favorite to succeed President Vladimir Putin, has reaped the rewards of loyalty.

Barely 25 and fresh out of law school, Medvedev first caught the attention of Russia's future president in 1990 when both worked in St. Petersburg's city hall. For the next 17 years he was one of Putin's most trusted aides.

On Monday, that dedication paid off, spectacularly, with Putin's endorsement of Medvedev to become his successor in the March 2 presidential election.

With Putin's prestige and the Kremlin's political machinery behind him, Medvedev, 42, seems all but certain of winning. "We have been close for more than 17 years, and I completely and fully support this choice," Putin said.

Medvedev, a first deputy prime minister, is considered liberal and business-friendly compared to the hawkish KGB veterans whom Putin has placed in other powerful Kremlin posts.

Putin can count on Medvedev not to alarm Western investors, or stability-minded Russians, by bolting off in some perilous direction.

Most of all, a Medvedev presidency would ensure that Putin retains significant influence in the Kremlin after he leaves office in May.

The speculation about Putin's future has included the possibility he could try to return as president. Putin's choice of Medvedev as a successor, said Vladimir Ryzhkov, a prominent liberal politician, made that more likely.

"The strategy is as follows: Medvedev is a compromise choice because he will allow Putin to keep a free hand. If Putin wants to gradually leave power Medvedev guarantees him comfort and security and will continue to listen to him," he said on Ekho Moskvy radio. "If Putin wants to return in two, three years ... Medvedev will be the person who will without a doubt make way for him."

Putin announced his support for Medvedev in a meeting with leaders of his United Russia party , which controls 70 percent of the seats in parliament , and three smaller pro-Kremlin parties. All the party leaders told Putin they supported Medvedev.

How much power a Medvedev presidency would have is an open question.

The constitution bars Putin from serving a third consecutive term. But he has not ruled out becoming prime minister or running for president at some point in the future.

And his supporters have urged him in the meantime to serve as Russia's "national leader," encouraging speculation that his successor could serve as a placeholder who would step down early.

Political analyst Alexei Malashenko told AP Television News that if Medvedev is elected, "he will be president for several months, then he will be replaced by Putin himself."

In person, Medvedev is unassuming and easygoing. Several inches shorter than the diminutive Putin, he has the appearance of a teddy bear, though one that prefers well-tailored suits.

People who have worked with Medvedev, the only child of two university professors, describe him as exceptionally smart.

And he has shown a quiet toughness in his dual positions as Cabinet minister and chairman of the board of Gazprom, the state-controlled energy giant that has helped the Kremlin reassert Russia's global might.

His image is belied by his taste in music, which is unequivocally hard rock. He boasts of owning the complete collection of Deep Purple in original vinyl records.

He could not have held onto his high Kremlin positions for so many years, supporters argue, if he lacked backbone. But he would never have gotten there at all if it were not for Putin.

One risk Putin takes by stepping down, even if temporarily, is that his successor will cut ties to the former president and rule alone. That's not expected to happen with Medvedev.

In a book published before he was first elected president in 2000, Putin named three people he trusted most. Medvedev was one of them.

Medvedev is not considered a Kremlin hard-liner, in contrast with the others who had vied for Putin's endorsement, chiefly fellow First Deputy Prime Minister Sergei Ivanov.

"Medvedev is not an extremist. He is not known for any kind of harsh views on politics, and apparently Medvedev better suits Putin's view of how to achieve continuity," said Lilia Shevtsova, an analyst at the Carnegie Moscow Center.

Georgy Satarov, the head of the INDEM think tank and a former Kremlin insider, said Putin named Medvedev to reduce the power of some of his restive fellow KGB veterans in top government posts. "They have become too powerful, and that created problems for Putin," Satarov said.

Putin said Monday that electing Medvedev would pave the way for a government "that will carry out the course that has brought results for all of the past eight years."

An exhausted-looking Medvedev watched his friend and mentor from across the table with a wan smile.

The Russian stock market surged on the news, with shares of Gazprom jumping 1.6 percent in minutes.

Medvedev graduated from the law faculty of St. Petersburg State University, Putin's alma mater. They both went to work in 1990 for Anatoly Sobchak, a former law professor who headed the St. Petersburg city government as the Soviet Union was crumbling.

Medvedev joined Putin in Moscow ahead of his 2000 election and worked as an aide before being named to the Cabinet in 2005.

Putin put Medvedev in charge of the so-called "national projects" , an effort to use part of Russia's oil windfall to modernize the nation's health care programs, scientific research complex and educational institutions. It's a job that made him popular with many voters.

For most of the past year, Russia's state-controlled television networks have given Medvedev lavish positive coverage roughly equal to Ivanov , leaving the political elite to feverishly speculate on Putin's plans.

Putin's move to appoint longtime associate Viktor Zubkov as prime minister, added to the uncertainty.

Monday's announcement seems to have ended it.

Many analysts felt that Ivanov, the former defense minister and a KGB veteran, was too ambitious for Putin to name his successor. Zubkov, meanwhile, sometimes sounded too authoritative to be a caretaker president.

Communist Party chief Gennady Zyuganov predicted Putin could try to accelerate talks to create a consolidated state of Russia and Belarus when he visits the Belarusian capital later this week , with the aim, perhaps, of becoming its president.

Such a move could leave the leaders of the two existing national governments little more than figureheads.

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Associated Press writers Douglas Birch and Mike Eckel contributed to this report.

Dmitri Medvedev

Age: 42; born Sept. 14, 1965, in Leningrad (now St. Petersburg).

Education: Graduated from Leningrad State University (now St. Petersburg State University) in 1987; received a law degree there in 1990.

Experience: Taught law at

St. Petersburg State University, 1990-99; aide to St. Petersburg mayor 1990-95; deputy chief of staff for the Russian cabinet, 1999; appointed by Vladimir

V. Putin as acting deputy chief of staff, 1999; headed Putin's 2000 election campaign; appointed Putin's first deputy chief of staff, June 2000; promoted to chief of staff, October 2003; appointed first deputy prime minister, 2005; board chairman of state natural gas monopoly OAO Gazprom, 2002-present.

Family: Married, one son.