Mr Mandelson urged partnerships to deal with mistrust

He said this was partly due to concerns over energy, which both thought the other was using as a political weapon.

Mr Mandelson urged the creation of a "grand bargain" with security of demand and supply o­n both sides as well as investment in each other's markets.

Another cause was different perceptions of the 1990s post-Soviet transition.

There was also a lack of respect between the two sides, he said.

"Neither [side] thinks they enjoy the respect from the other they are entitled to expect," he said at a conference in the Italian city of Bologna.

To overcome this mistrust it would be necessary to anchor the Russian economy in the EU's single market and the international trade system, he added.

Partnership call

"Relations between the EU and Russia ... contain a level of misunderstanding or even mistrust we have not seen since the end of the Cold War," he told the conference.

In my view the roots of these misunderstandings lie in different perceptions of the 1990s and what's happened since the collapse of the Soviet empire Peter Mandelson Are EU-Russian relations deteriorating?

But he later clarified his remarks, saying there was not the same animosity between the two sides that there was during their nuclear-based confrontation.

"Since the Cold War we've had obviously very different, much better relations, ... nonetheless I think they're going through a very difficult period," he told the BBC World Service's Newshour programme.

"I'm somebody who believes that Russia's interests and Europe's interests will be served by the strong partnership between the both of us," he added.

"You're o­nly going to create that partnership if you deal with the current misunderstandings and mistrusts between us, and in my view the roots of these misunderstandings lie in different perceptions of the 1990s and what's happened since the collapse of the Soviet empire."

The trade commissioner said it was not surprising that Russians were sceptical about democracy and the market economy, in view of the unhappiness caused by economic liberalisation and privatisation during the 1990s.

'No respect'

Mr Mandelson told the conference that the EU needed guarantees Russia would not cut off oil and gas supplies.

Recent rows over energy costs between Russia and former Soviet states have caused temporary disruption of supply to western Europe and sparked accusations that Russia is using energy exports as a political weapon.

Russia, meanwhile, believed that the EU was generating an insecurity of demand for its supplies, Mr Mandelson said, and urged Europe not to give the impression it was determined to avoid dependence o­n Russian oil and gas at all costs.

He said Russia should diversify its economy away from a reliance o­n energy.

"In the modern age, the essential characteristics of a country with Russia's huge potential cannot be heavy, centralised political control, and an economy based o­n the rents from energy resources," he said.

Membership of the World Trade Organisation would both strengthen the Russian economy and make resolving trade disputes easier, he told the conference.