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The government gave its backing on Thursday to the 2007 state domestic borrowing program totaling 305 billion rubles ($11.58 billion), of which around 70 percent will be used to finance increased state spending.

«This is the first time the balance between new borrowing and redemptions will rise, with the proceeds now also being channeled to finance budget spending», Finance Minister Alexei Kudrin told the Cabinet meeting.

Kudrin said the government planned to raise 293.6 billion rubles in cash by issuing domestic bonds in 2007, of which 80.1 billion rubles would be used to redeem outstanding bonds.

«Thus, net borrowing aimed to finance budget spending will amount to 213.5 billion rubles, half of which will be used to pay off outstanding foreign debt», Kudrin said.