Finland has said it could join NATO in defiance of Russia's warning that the alliance should not be allowed to expand any further to the east.

Sauli Niinisto, president of the Nordic country, made the remark during a New Year address on Saturday which seemed designed to antagonise Vladimir Putin.

Putin had previously demanded cast iron guarantees that Ukraine never be allowed to join NATO, saying the alliance's eastwards expansion is a threat to his border. 

That prompted Niinisto's remark, which appears designed as a warning to Russia not to threaten neighbouring states.

Finland shares a lengthy land border with Russia, and two countries fought a short but bloody war over it between 1939 to 1940 which saw Finland inflict heavy losses on Soviet forces. 

'Finland's room to manoeuvre and freedom of choice also include the possibility of military alignment and of applying for NATO membership, should we ourselves so decide,' Mr Niinisto said. 

He also called on the EU to take a more active role in deterring Russian aggression, seemingly a rebuke to Germany which for years has taken a soft line with Moscow because the two share close economic ties.

'In this situation Europe cannot just listen in,' Niinisto added. 

'The sovereignty of several member states, also Sweden and Finland, has been challenged from outside the Union. 

'This makes the EU an involved party. The EU must not settle merely with the role of a technical coordinator of sanctions.'