Russian President Dmitry Medvedev tuesday warned of a new arms race if it fails to reach an accord with the West on the missile shield in Europe.

“We are facing the following alternative in the next ten years: either we reach an agreement on missile defence and create a fully-fledged joint mechanism of cooperation, or if we fail to do so, a new round of arms race will start, and we will have to adopt decisions on the deployment of new strategic weapons,” Medvedev declared in his annual state of the nation address.

At a recent NATO-Russia summit in Lisbon, the two parties agreed to formulate terms for missile defence cooperation by June 2011 as Moscow sees deployment of NATO missile-defence systems close to its borders as a security threat and destroy the strategic balance of forces in Europe.

Addressing the members of the two Houses of the Russian parliament and the government in ornate St. George’s Hall of the Grand Kremlin Palace, Medvedev underscored: “The proposed European missile defence network must guarantee the security of all countries on the continent”.

At the Lisbon summit on 20th November, Medvedev had expressed Russia’s readiness to participate in a joint missile defense shield in Europe only on principles of equality and equal responsibility.

After the Lisbon summit, Moscow’s daily Kommersant had reported that Medvedev had offered to use its national systems to protect Europe from missile attack from the east and south in exchange for the protection of Russian territory from a missile attacks from the west.

Experts here believe that Moscow’s ‘just’ demand does not fit into the Pentagon’s thinking, which views European missile shield as an instrument to cripple Russia’s second nuclear strike capability in case of a nuclear attack.