Horrendous congestion is a fact of life in Moscow, where a car journey of just a few miles can take hours, and drivers frequently park on pavements, making them virtually impassable to pedestrians.

Foreign investors list the city's frequent gridlock as one of their most serious complaints, saying it imperils Putin's and Prime Minister Dmitry Medvedev's goal of making Moscow a global finance centre by 2020.

City authorities launched a 568-space pilot project on November 1, under which they charge 50 roubles per hour for parking spaces in certain areas, or levy an automatic fine of 2,500 roubles.

The number of cars on roads within the pilot area dropped immediately by four per cent on November 1, city authorities said on Friday. A week later, their number remains two per cent down on previous averages, and roads are moving slightly faster, they said.

"You can see there's two Moscows - one within the pilot project and another outside its borders," Sergei Marinichev, Moscow's parking 'tsar' told a news conference on Friday.

He said the authorities were ready to expand paid street parking across the entire city within three years, introducing parking fees as far out as the city's orbital motorway.

Moscow is the latest metropolis to adopt charges to deter drivers, following cities such as London, which levies a congestion charge for driving through the centre.

City officials hope the changes will cut average journey times during rush hour to 50 from 66 minutes by 2025. Parking fines were increased tenfold earlier this year but road congestion in the city of 11.5 million remains bad.

Angry central Moscow residents say they have been left paying the price of an exercise in money-making.

Leonid Antonov, a city resident who has campaigned against the project, said the scheme wasn't working and that people were causing congestion elsewhere by parking their cars in squares where there were no charges.

"People who are used to driving to work are not changing their habits," he told Reuters. (Reporting by Reuters trainee Sonia Elks; Editing by Douglas Busvine and Andrew Osborn)

• A Permanent Economic Emergency