Russia will spend nearly £94.5bn on buying arms up until 2011, the Russian President Dmitry Medvedev has said.
The move comes over concerns about Nato's expansion near Russia's borders and regional conflicts.
It is thought the brief war in Georgia exposed problems with outdated equipment and practices within Russia's armed forces leading to calls for military modernisation.
The short war between Russia and Georgia was the catalyst for our report on the country last October.
In Panorama's Should we be Scared of Russia? - reporter Mark Franchetti investigated the growing gulf between Russia and the West and asked if the current tensions might degenerate into a new Cold War or even a violent confrontation.
You can view the film here.
