President Vladimir Putin on Friday signed into law a ban on the adoption of Russian children by American families that activists slammed for making orphans pawns in a diplomatic row between Moscow and Washington.

The law -- retaliation for a US law punishing Russian officials implicated in the 2009 prison death of the whistle-blowing attorney Sergei Magnitsky -- will come into force on January 1, the Kremlin said in a statement.

The highly contentious law is seen as the toughest piece of anti-US legislation during Putin's 13-year rule and has prompted objections not just from activists but even some cabinet ministers.

A particular subject of concern are the dozens of Russian children who are now in an agonising limbo. Having been prepared for US adoption they are now effectively banned from leaving for their new lives.

The Kremlin children's rights envoy Pavel Astakhov said a total of 52 Russian children who had been prepared for US adoption should now go to Russian parents specially selected by regional governors.

"I believe they should be adopted in Russia," Astakhov, a key backer of the legislation, told Interfax.

The law had been passed in three readings by the State Duma, the lower house of parliament, and then at a session Wednesday held by the Federation Council or upper house.

Putin had said on Thursday that he intended to sign it, ending days of speculation about his position.

Rights activists and the Russian opposition slammed the law, accusing Putin of using children as hostages in a political disagreement.

"Our poor children, orphans, will suffer because they are used as token coins in a political game between two countries," veteran rights campaigner Lyudmila Alexeyeva told RIA-Novosti.

"That is immoral, it's cannibalism."

Pro-Kremlin lawmakers put together the bill in a matter of days in response to a new US law sanctioning Russian officials implicated in Magnitsky's death.

At first it was directed against Americans deemed guilty of violating the rights of Russians.

However the Duma later added two tough amendments, one banning US adoptions, and the other banning Russian NGOs that have members with US citizenship or financing from the US.

Its passage revealed cracks in the Russian leadership between those who would prefer to get tough with the United States and ministers who back a more cautious approach.

Foreign Minister Sergei Lavrov and the cabinet's social affairs chief, Deputy Prime Minister Olga Golodets, both spoke out against it.

Reports have said that the law was authored by Vyacheslav Volodin, the hawkish first deputy chief of Putin's Kremlin staff who headed his presidential campaign.

By apparent coincidence, a Moscow court on Friday also acquitted the former deputy chief of a Moscow prison where Magnitsky was held over causing his death by negligence.

Dmitry Kratov was the only Russian official to still be facing charges over the Magnitsky case.

Putin on Thursday had mounted a firm defence of the ban on US adoptions while accusing the United States of "acting brazenly and arrogantly" towards Russia.

He said those who believed the law limited the opportunities of orphans failed to see the threats to Russian society posed by a steady outflow of children.

"There are lots of places in the world where living standards are higher than they are here," said Putin.

"And what -- are we going to send all our children there? Perhaps we should move there ourselves?"

He also raised the spectre of Russia going to "ruin" if it continued to allow foreigners to take care of its young.

US families adopted nearly 1,000 Russian children last year and are the number one foreign destination of the country's orphans.

Putin also signed a decree Friday on measures to protect orphans in Russia, part of a clear drive for all orphans in the country to be brought up in Russian families.

Astakhov has raised the prospect of Russia banning foreign adoptions altogether once the new orphan support programme is in place.

"We will be ready to do that (eliminate foreign adoptions) after the adoption of the federal targeted programme on orphans," Interfax quoted Astakhov as saying on Thursday.