In an apparent effort to counter criticism at home and abroad of a growing centralization of powers in Russia, Putin said that he would ensure that state media offered access to all political forces.
At a meeting with leaders of both houses of parliament and the main political parties including the opposition Communists and nationalist Rodina, Putin also said he would allow parties that win regional elections to put forward suggestions on who should be appointed as regional governors.
Putin's initiative to eliminate elections for governors was widely criticized abroad as a sign of increasingly authoritarian rule.
"This decision should increase the role and influence of parties in society," said Putin.
Meanwhile Wednesday, the newspaper Gazeta cited unidentified sources as saying Fradkov might announce his resignation this week.
The newspaper said Fradkov had failed to implement unpopular policies - including the elimination of free transportation and medicine for the elderly - without raising public anger. Large protests that broke out after the free benefits were replaced with small cash payments were an unusual show of anger among Russians, whose support for Putin previously had appeared strong.
Government spokesman Denis Molchanov said rumors of Fradkov's imminent departure were "complete nonsense," the Interfax news agency reported.
In February, an opposition-sponsored vote of no-confidence in the Cabinet failed. At that time, parliament speaker Boris Gryzlov said some ministers would be given two months to correct their errors.
At his meeting in the Kremlin on Wednesday, Putin said that he had ordered Fradkov to raise the salaries of the millions of state employees by at least 150 percent - not including rises in line with inflation - over the next three years, the ITAR-Tass news agency reported.
Putin named the little-known Fradkov just two weeks before his re-election in March 2004, in a Cabinet reshuffle seen as aimed at enlivening a dull presidential race and consolidate control over the government amid infighting among factions. He replaced Mikhail Kasyanov, who has emerged as a potential candidate for the presidency in 2008.
HENRY MEYER, Associated Press Writer
Russia has left the list of 33 largest holders of US government bonds, after the country disposed of at least a third of remaining bonds