Austria signed up to build part of Russia's South Stream gas pipeline on Saturday, while visiting Prime Minister Vladimir Putin scorned the EU's rival Nabucco project as futile.

Politically neutral Austria has become a key battleground for the competing pipelines, both of which are expected to cross the Alpine state before delivering gas to other European Union members.

The €7.9 billion Nabucco pipeline is part of the EU's long-term effort to diversify its natural gas supplies and reduce dependence on Russia by bringing up to 31 billion cubic metres of gas annually from the Caspian regionto an Austrian hub via Turkey and the Balkans.

But it has no confirmed suppliers and has been hit by numerous delays.

"Building a pipeline without supply contracts is pointless and extremely dangerous," Mr Putin said in the Austrian capital. "Name me one contract that has been signed for Nabucco."

He was speaking after Austrian Chancellor Werner Faymann's government provided a key signature needed to launch South Stream, Russia's second post-Soviet gas pipeline project.

It will run under the Black Sea to the Balkans, with one of its branches passing through Austrian oil and gas company OMV's hub in Baumgarten, also Nabucco's final destination.

Mr Putin stressed that Russia's abundant natural gas reserves allowed it to ensure South Stream's viability.

"We can guarantee Russia's growing demand and that of essentially all our clients in Europe for the next 100 years," the prime minister said.

He said South Stream would allow Austria to increase Russian gas imports by two bcm per year.

Mr Faymann sought to play down the conflict, stressing that Austria would benefit from both systems.