Russian President Vladimir Putin on Thursday insisted Moscow will not be dragged into an arms race by NATO as he accused the US-led alliance of tearing up the military balance in Europe.

The Kremlin strongman warned that Russia "knows how to react adequately and we will" to NATO bolstering its forces in eastern European nations such as Poland and the Baltic states in moves he said were aimed at "undermining the military balance built up over decades".

"We don't intend to give in to this militaristic frenzy but it seems that is what they are pushing us to, to provoke a costly and pointless arms race," Putin told Russian diplomats in Moscow.

"This will not happen. But we will also not be weak. We will always be able to defend ourselves reliably," he said.

Relations between Russia and the West have slumped to their lowest point since the Cold War over Moscow's 2014 annexation of Crimea and its alleged masterminding of a separatist uprising in Ukraine.

Fears of Russian expansionism have sent a chill through NATO members such as Estonia, Latvia, Lithuania and Poland and have seen the US-led alliance bolster its presence in eastern Europe.

NATO announced this month that it would deploy four battalions to the Baltic nations and Poland to counter a more assertive Russia, ahead of a landmark summit in Warsaw on July 8-9.

Russia bitterly opposes NATO's expansion into its Soviet-era satellites and has said it will create three new divisions in its southwest region to meet what it described as a dangerous military build-up along its borders.

Putin has massively ratcheted up military spending since coming to power over 16 years ago in a bid to overhaul Russia's armed forces, which often rely on creaking Soviet-era weaponry.

On Wednesday Russia's Defence Minister Sergei Shoigu vowed to counter the NATO build-up by sending two thousand units of new and modernised equipment to the country's western military district which borders several NATO member countries.

Due in part to Western sanctions over Ukraine and the fall in oil prices, Russia is currently suffering its longest recession since Putin took power.

Russia vows to counter NATO build-up
Moscow (AFP) June 29, 2016 - Russia's defence minister on Wednesday rebuked NATO for bolstering its military presence in eastern Europe and vowed Moscow will take countermeasures.

"The US and other NATO members continue to build their military potential, first and foremost in countries neighbouring Russia," defence minister Sergei Shoigu was quoted as saying by Russian news agencies.

"Such actions by our Western colleagues will undermine Europe's stability and force us to take countermeasures, first of all, in the western strategic direction."

Shoigu said that "more than 2,000 units of new and modernised equipment" would be deployed in Russia's western military district this year.

This latest warning comes nearly two months after Shoigu said Moscow was poised to set up three new military divisions in the west and south of the country to counter NATO forces close to its border.

Relations between NATO and Russia have soured over Moscow's annexation of Crimea from Ukraine and eastern European countries worried that they too might be targets of Russian aggression.

In response, NATO has deployed additional military resources on its eastern flank. At its previous summit in 2014, the alliance decided to reinforce its presence along the Russian border, angering Moscow.

Russia has repeatedly accused the US-led military alliance of trying to contain it ever since the collapse of the Soviet Union opened up the former Eastern Bloc.

Shoigu on Wednesday claimed that the intensity of NATO's activities along the Russian border had "more than doubled", claiming that up to 30 NATO warplanes and some 1,200 pieces of military equipment are stationed on a rotational basis in eastern Europe.

The minister warned that the intensity of NATO activity in the region could "considerably increase" after the alliance's next summit, which is taking place in Warsaw July 8-9.