* Recovery slow but real, jobs have been preserved
* No mention of modernisation, privatisation
* State corporations are a necessity
* AvtoVAZ not an assembly plant, must keep Lada brand
By Gleb Bryanski and Dmitry Zhdannikov
MOSCOW, Dec 3 (Reuters) - Russian Prime Minister Vladimir Putin pledged more support on Thursday for car and steel makers, praising his government for preserving jobs without endorsing President Dmitry Medvedev's calls for economic modernisation.
Medvedev has made diversification one his main goals since succeeding Putin in 2008 and has said the state role must fall to help the country reduce its heavy dependence on oil and gas.
But Putin, who remains Russia's most powerful politician, focused on a traditional statist approach, which he said had helped save Soviet-era car giant AvtoVAZ.
Russia's giant state corporations, which Medvedev has pledged to disband, were "a necessity", he said.
"The peak of the crisis has been overcome ... Exit from the crisis requires time, strength and no little funds," Putin told a marathon Q&A session with Russian people on state television.
Asked later by a reporter if anything was going wrong in the cabinet and whether he would dismiss anyone, Putin replied: "What for?"
Russia has been hit much harder by the global crisis than other major emerging economies, but a recovery in oil prices has helped avoid bigger problems, such as a banking or debt crisis.
The tone of Putin's speech was much more upbeat than in the same session a year ago, when he had to answer questions about a sharp rouble devaluation, soaring unemployment and inflation and a rescue plan for banks.
"The economy has grown by an average of 0.5 percent per month over the last five months. I'm counting on these positive trends in economic development becoming more significant in the middle of next year," he said.
This year, GDP will fall by a better than expected 8.5-8.7 percent, Putin said, making no reference to his previous call to foreign investors to come to Russia to help spur growth.
"Putin is being careful not to promise too much or to raise people's expectations too high in case they fall short," said Chris Weafer, chief strategist at Uralsib.
"That could damage his position with voters. 2012 is still very much an open question," he said referring to a presidential election in which both Medvedev and Putin could run.
WHO WILL WORK IF ALL GO TO JAIL?
Putin said his "tandem" system of government with Medvedev worked well as they had common principles.
A state role was still needed at carmaker AvtoVAZ, where government rescue efforts were no different from U.S. efforts to save General Motors, Putin said a week after clinching a deal with Renault to save the Lada manufacturer.
"We must not lose this brand, even if the share of our foreign partners changes," Putin told AvtoVAZ's workers via a video link-up. "We will never agree to pure assembly functions."
AvtoVAZ shares closed 3.3 percent up, outperforming the broader market, which stayed unmoved on Putin's speech.
Putin praised the owner of steel major MMK, Viktor Rashnikov, and the head of car maker Kamaz as efficient managers while pledging to support the steel industry by increasing spending on the rail monopoly.
Indebted tycoon Oleg Deripaska will be also encouraged by comments that the situation in the city of Pikalyovo was stabilising, six months after Putin rebuked him.
Asked why no one was put in jail over mass unemployment and crisis in Pikalyovo, Putin said: "If we put everyone in jail, who would work?"
He also warned private investors in the power sector against cutting investments pledged during privatisation.
"They received certain preferences during this (reform) process, have taken on some obligations, and now the time has come to meet those obligations. We cannot afford being late on power sector development," he said. (Editing by Paul Taylor)
(dmitri.zhdannikov@reuters.com, + 7 495 775 12 42)