Russian President Vladimir Putin has been chosen by the Time magazine as its 'Person of the Year' for his "extraordinary feat of leadership in taking a country that was in chaos and bringing it stability".

Former US vice-president and this year's Nobel Peace Prize winner Al Gore and Harry Potter author JK Rowling were runners-up for the title.

Announcing the selection on NBC television's Today Show, Time's Managing Editor Richard Stengel said Putin was the new tsar of Russia.

Holding the former KGB agent responsible for enabling Russia to "roar back to the table of world power", Time believes Putin has the greatest influence on world events -- for better or for worse.

"He is dangerous in the sense that he doesn't care about civil liberties, he doesn't care about free speech. He cares about stability. But stability is what Russia needs. And that's why Russians adore him," Stengel said.

The award, given out every year since 1927, is not an honour or an endorsement but about recognition of the world's most powerful individuals and forces shaping that world – for better or for worse, Stengel said.

"It is ultimately about leadership - bold, earth-changing leadership."

Last year the magazine named 'You' as its person of the year, reflecting the growing importance of user-generated Internet content.

What apparently influenced the decision of Time's editors this year is the fact that Putin is likely to continue to play a major role in world affairs even after he steps down as President.

The selection comes within days of his assertion that he would be prepared to serve as prime minister if his chosen successor Dmitry Medvedev becomes President.