German Chancellor Angela Merkel played down Berlin's future energy dependence on Russia in view of its nuclear power phase-out, at talks with President Dmitry Medvedev on Tuesday.

Merkel said that Germany, the top importer of Russian gas, would develop its coal-fired plants, energy efficiency and renewable power sources as it closed its reactors by 2022 so that its needs would stay within a "reasonable range".

She told a German-Russian forum in this northern city ahead of an annual joint cabinet meeting: "I just want to say that I think that perhaps this idea that the sky is the limit when it comes to our gas imports is a little exaggerated."

She said that "this is not meant to be an anti-Gazprom speech," referring to the Russian state-owned energy giant.

"But I just wanted to say that our targets are not completely out of this world. They lie in a reasonable range that can surely be met by Gazprom."

Russian Deputy Prime Minister Viktor Zubkov said with a smile that if gas exports to Germany rose by 30-35 percent in the coming years "that would not be bad".

Merkel said: "We'll see, we'll see."

Germany's decision, sealed this month, to shutter all of its nuclear reactors within 11 years has left it scrambling to nail down other energy sources, making gas and oil-rich Russia an even more attractive partner.

Last Thursday, Gazprom and Germany's number-two utilities group RWE announced exclusive negotiations on a sweeping deal to construct power plants in Europe.

And Russia aims to boost deliveries of gas to Germany through the Nord Stream pipeline being built under the Baltic Sea and due to go online in October.

But even with growing trade ties -- Russian exports to Germany reached 31.8 billion euros ($45.0 billion) last year with 26.4 billion euros' worth of goods going the other way -- Medvedev said the countries should be able to have frank talks about their differences.

"It is better to argue than to be silent," he said.

On a key point of contention between the countries -- freedom of travel -- Merkel acknowledged that Germany had been the "brake" on liberalisation of visa rules between Russia and the European Union.

"We discussed this issue with President Medvedev and agreed we must develop a step-by-step plan," she said, adding that this could include exceptions for hospital workers and gradual easing of restrictions for students and tourists.

"I think if Germany begins to be a bit more open then Europe will follow suit."

The 13th so-called "government consultations" are aimed at bolstering ties between the wartime foes and advancing the modernisation of Russia's political and legal systems after the fall of communism.

Merkel and Medvedev placed wreaths at a memorial for a group of prisoners murdered by the Nazis in Hanover in May 1945 including 154 Soviet citizens, then attended a breakfast with Russian and German business executives.

The leaders are to ink 15 economic, political and environmental agreements, oversee the signing of several business contracts and hold talks on international hotspots including North Africa and the Middle East.

This year's meeting, however, was prefaced by an embarrassing debate surrounding a democracy prize from a private German foundation that was to go to Russian Prime Minister Vladimir Putin.

Organisers announced at the weekend that they would rescind their invitation to Putin to accept the Quadriga Prize after a storm of protest in Berlin over his disputed record on human rights, media freedom and the Chechnya conflict.

Although Russia's ambassador to Germany complained about a "very distasteful and indecent" flap, both governments insisted it would not mar the talks.

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