Russia would reap golden opportunities to transform its oil-dependent economy if admitted to the World Trade Organisation, but industries emerging slowly from a Soviet past would suffer wrenching change.

Russia and the European Union, the world's largest trading bloc, appeared to be on the verge of a landmark trade deal that will bring Moscow closer to fulfilling its goal of gaining admission to the WTO as early as this year.

Details of the agreement were expected to be announced at a EU-Russia summit in Moscow on Friday. Russia still has to hammer out bilateral deals with other powerful WTO members such as the United States, Japan and China.

Economists and analysts say Russia has little to lose and everything to gain by joining the WTO, a step which will complete its often stormy transition from communism to paid up membership of the world's largest trading club.

"The main advantages are that it helps integrate the economy globally. It will make Russian companies more competitive and give consumers better products," said Christof Ruehl, the World Bank's chief economist in Russia.

Barriers to trade, protecting many enfeebled manufacturing industries, are likely to come tumbling down, exposing them to the full force of foreign competition. Imports of new cars and planes are currently subject to stiff tariffs.

A blast of unfettered competition could throw thousands out of work in aging plants built to serve the Soviet state command economy and starved of investment. From Moscow and the Ural mountains to the Far East they will have to modernise or perish.

President Vladimir Putin, elected to a second four-year term in March, has vowed to double the size of the economy within a decade and improve the lot of millions living in penury.

Key to Mr Putin's economic ambitions is a blueprint for reducing the country's chronic dependence on oil exports, a boon while prices trade at 20-year highs but a disaster in the making if prices should ever go into freefall.

Joining the WTO will give Mr Putin the opportunity he needs to accelerate efforts to diversify the economy and sweep away a raft of protective barriers which are holding up modernisation of manufacturing, banking and insurance, say analysts.

"Just as joining the European Union has been a catalyst for Central European countries to reform, WTO membership can also be a stimulus for change in Russia," said Peter Westin, chief economist at Aton brokerage in Moscow.

Russia's spectacular recovery since a post-Soviet borrowing binge turned sour and brought the economy to its knees in 1998, has been driven by soaring prices for oil, gas and valuable metals such as platinum, which are the country's main exports.

While investment has poured into these industries, much of the rest of the economy has been starved of capital and once flourishing activities, such as manufacture of cars and airliners, have withered despite being shielded from foreign competition.

As a price for joining the WTO, the EU has pressed Moscow to agree to raise low prices of gas which its says are being supplied to Russian industry for less than it costs to extract the fuel from the ground.

Russia is also expected to allow foreigners and independent producers access to its vast gas pipeline network.

Analysts believe Russia, which has one quarter of the world's proven gas reserves, is likely nonetheless to charge domestic gas consumers well below the world market price for the foreseeable future.

"Russia will never raise its gas prices fivefold. It is one of the country's biggest advantages. One third of Russia is in a permafrost area and a lot of non-ferrous metals industries are only viable because energy prices are so low," said a Russian investment banker.

By joining a 147-nation trading club with procedures for settling trade disputes, Moscow will no longer be at the mercy of other countries' unilaterally slapping hefty duties on imports of Russian goods such as poultry and steel.

"Being in a multilateral trading system means that the United States, for example, cannot just impose trade sanctions on Russia if it feels like it," said an official at WTO headquarters in Geneva.

Russia can also expect to share in growing world trade. "It (WTO membership) streamlines regulations and standards in industries and services. It also means gradual liberalisation of trade," said the World bank's Ruehl.

One of the biggest obstacles to Russia spreading its growing oil wealth around the country lies in a tiny and fragmented bank industry which lacks the capacity to channel savings into productive investments outside oil and gas.

"In exchange for not raising gas prices too much we will have to open insurance, banking and financial services to competition," said Yevgeny Gavrilenkov, chief economist at Troika Dialog in Moscow.

Foreign banks have played a big role in spreading wealth and speeding the growth of a market economy in East European countries such as Poland and Hungary, but are still allowed only a token presence in Russia.

"More competition for banking would be very good. It is the only major industry which has never faced serious competition," said Mr Gavrilenkov.