KIROV, Russia - Russian opposition leader Alexei Navalny was sentenced to five years in jail for theft on Thursday, an unexpectedly tough punishment which supporters said proved President Vladimir Putin was a dictator ruling by repression.

Policemen detain a man during a protest against the verdict of a court in Kirov, which sentenced Russian opposition leader Alexei Navalny to five years in jail, in central Moscow, July 18, 2013. Russian opposition leader Alexei Navalny was sentenced to five years in jail for theft on Thursday, an unexpectedly tough punishment which supporters said proved President Vladimir Putin was a dictator ruling by repression. [Photo/Agencies]

Navalny, an anti-corruption campaigner who led the biggest protests against Putin since he took power in 2000, hugged his wife Yulia and his mother, shook his father's hand and then passed them his watch before being led away in handcuffs.

"Shame! Disgrace!" protesters chanted outside the court in Kirov, 900 km (550 miles) northeast of Moscow. Some supporters wept and others expressed shock and anger.

State prosecutors had asked the court to jail Navalny for six years on charges of organising a scheme to steal at least 16 million roubles ($494,000) from a timber firm when he was advising the Kirov region governor in 2009.

But even a five-year sentence means he will not be able to run in the next presidential election in 2018 or for Moscow mayor in September as he had planned. Some political analysts had expected the court to hand down a suspended sentence, to keep Navalny out of prison but rule out any political challenge.

The United States and European Union voiced concern over the conviction, saying it raised questions about the rule of law and Russia's treatment of Putin's opponents. The White House called it part of a "disturbing trend aimed at suppressing dissent".

Russian shares fell on concerns that the ruling may provoke social unrest, after a case that has led to comparisons with the political "show trials" under Soviet leader Josef Stalin.

Thousands of Russians protested in Moscow and St Petersburg late into the evening and police detained dozens in both cities, but there were no major clashes.

In a last message from court, Navalny, 37, referred to Putin as a "toad" who abused Russia's vast oil revenues to stay in power, and urged his supporters to press on with his campaign.

"Okay, don't miss me. More important - don't be idle. The toad will not get off the oil pipeline on its own," he wrote on Twitter.

At least 3,000 gathered near the Kremlin in Moscow under a heavy police presence, intermittently blocking main streets and shouting "Shame!" and "Putin is a thief!"

Police plunged into the crowd to pluck out people holding Navalny portraits. A police official said about 50 were detained but that they would be released. At least 1,000 people protested in St Petersburg and smaller rallies were held in other cities.