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The 36-year-old anti-corruption blogger, who has emerged as one of Putin's most powerful opponents during months of protests against the Kremlin leader's 12-year rule, faces the threat of a 10-year jail term over allegations on Tuesday that he was involved in embezzling money in 2009.
He denied the charges and likened Putin's tactics to the harsh treatment meted out to opponents by Belarus President Alexander Lukashenko, who has often been portrayed by foreign politicians as Europe's last dictator.
"Judging by the way the situation is developing now, common logic suggests that yes, 100 percent, they will absolutely certainly put me in prison. I'm trying to prepare my relatives for that now," Navalny told Reuters in an interview in his sparsely furnished Moscow office.
"Otherwise, why do they need to bring up those strange charges which everybody is laughing at? Why are they doing all this? If a gun is on the wall, it should be fired."
Navalny, looking relaxed in a pale T-shirt and shorts a day after he was summoned by federal investigators to face charges, is just one of a group of opposition leaders who have organised protests against Putin since last December, at times attracting crowds that witnesses put at 100,000. He has no political party.
But many protesters describe Navalny, a tall man with cropped hair, as a more charismatic leader and stronger public speaker than his party-political counterparts, and his anti-corruption blogs have attracted a big following, particularly among the Internet-savvy emerging middle class.
He is accused of helping organise the theft of timber from a state firm that caused authorities in the Kirov region to lose more than 16 million roubles ($497,000).
The charges relate to 2009, when Navalny was advising the region's governor. He says they are "absurd" and part of a Kremlin strategy to intimidate critics, prompted by Putin's concern over a rally that turned violent on May 6.
"After May 6 it became evident that the Kremlin had embarked on the path of Belarussian-style repressions. They will now behave this way. Therefore, they want to open a criminal case against everyone deemed to be dangerous to them so they can jail him at any moment and isolate him for a long time," he said.
"You need to understand a very simple thing. To keep himself in power, Vladimir Putin is ready to go very far. Much further than just putting me or anybody else in prison. Much further."
PUTIN AWARE OF RISKS
Police used batons against protesters and temporarily detained more than 400 during the rally on May 6, across the Moscow River from the Kremlin, where Putin was inaugurated the following day.
Putin's ruling United Russia party has rushed a series of laws through parliament since the former KGB spy's return to the Kremlin. Opposition leaders say the laws are part of a campaign to stifle dissent.
These include increasing fines for protesters who step out of line, closer controls on foreign-funded campaign and lobby groups and tougher rules on the Internet, often used by the anti-Kremlin movement to organise protests.
Three female members of a punk band, Pussy Riot, are currently on trial after performing a "punk prayer" against Putin on the altar of Moscow's main cathedral in February.
Navalny said his own treatment would come at a cost - a hint that it could backfire on Putin by rallying opposition to the Kremlin - but that the president accepted the risks involved.
"He understands that every action has its own costs. And my unlawful arrest has its own costs, too. But they are costs he is prepared to tolerate compared to the possibility of losing his power, property, freedom and so on," Navalny said.
Critics say Navalny has nationalist tendencies, that the opposition is united by little but hostility to Putin and that the president retains a lot of support outside big cities, where most of the protests this year have taken place.
Navalny, a trained lawyer, said he still believed that Putin's opponents were in the majority in Russia - a statement he made last December when released after 10 days in jail for his role in the initial protests against Putin after allegations of fraud in a parliamentary election won by United Russia.
"I feel we are in the majority. That feeling is growing," he said. "It is clear now that the aggressive minority that has seized the leadership positions and the power structures will not give them up."
He said the authorities felt their power ebbing and warned: "I don't know what Putin has to do for his support to start rising - only by stirring up some war and winning it."