Former Soviet President Mikhail Gorbachev, 77, is teaming up with a Russian billionaire to form a new political party. (Josh Reynolds/Associated Press)

A Russian billionaire said Tuesday that he is teaming up with former Soviet president Mikhail Gorbachev to form a new political party that will challenge the country's recent steps away from democracy.

Alexander Lebedev, a former legislator who has built a fortune in business and investment, said he and Gorbachev will work together in a political movement tentatively named the Independent Democratic Party.

Lebedev and other Kremlin critics accuse current Prime Minister Vladimir Putin of reversing Russia's post-Soviet movement toward democracy and enhancing state control over the economy, courts and media during his term as president from 2000 to 2008.

Gorbachev could not immediately be reached for comment, and it wasn't clear whether the 77-year-old planned to seek an active political role 17 years after the Soviet Union collapsed around him, costing him his job as its last leader.

It would be an uphill battle for Gorbachev, who is popular abroad but reviled by many Russians who blame him for the Soviet breakup.

He won less than one per cent of the votes in the 1996 presidential election and has not run since.

In a statement on his website, Lebedev said the new party was Gorbachev's idea.

"The initiative belongs to President Gorbachev. He gave our people freedom, but we have not learned how to use it."

Lebedev said the party would advocate a "return to a normal electoral system," calling for the restoration of gubernatorial elections, a stronger parliament, independent courts and media, and a smaller state role in the economy.

Gorbachev has generally praised Putin for lifting the country out of the post-Soviet troubles that many Russians blame on the late Boris Yeltsin, a longtime rival of Gorbachev who replaced him in the Kremlin.

But Gorbachev has cautiously criticized the political system put in place by Putin. The United Russia party of the immensely popular Putin dominates parliament and regional governments while Kremlin critics have been sidelined, sometimes through force.

Lebedev, a major private shareholder in the Russian airline Aeroflot, joined with Gorbachev in 2006 to buy 49 per cent of Novaya Gazeta, an independent newspaper that has challenged the Kremlin through its investigative reporting. Anna Politkovskaya, a prominent investigative reporter murdered in October 2006, worked for Novaya Gazeta.