Ukraine in gas talks with Gazprom

Gazprom supplies Europe with a quarter of its gas

Ukraine's energy minister has been holding crucial talks to try to avert a threat from neighbouring Russia to cut gas supplies to the country.

Russian gas monopoly Gazprom said the threat would be carried out unless a $1.3bn (£650m) bill is paid this month.

Reports from Russia say Gazprom is now claiming that Ukraine had agreed to meet the deadline - but this was unconfirmed by Kiev.

The European Commission has called for a "speedy solution" to the dispute.

Previous disputes between Russia and Ukraine over gas supplies have led to cuts in gas deliveries to Europe.

'Complicated' issue

The Ukrainian energy minister, Yuriy Boiko, has been meeting with senior Gazprom executives, and the country's prime minister, Viktor Yanukovych, has said that he may also go to Moscow.

"The issue is very complicated," he told a cabinet meeting in Kiev.

Earlier, Gazprom said Ukraine had taken no action despite repeated requests and warned that it would be forced to decrease deliveries if the debt was not settled.

"Bearing in mind the approaching winter season and higher demand for gas, as well as the Ukrainian repeated failures to fulfil gas contracts, Gazprom will have to reduce gas deliveries to Ukrainian consumers if the debt is not settled in October," the company said.

Gazprom's threat comes two days after parliamentary elections in Ukraine. No clear winner has emerged as rival parties claim victory.

Bullying denied

In August, Gazprom said it would halve supplies to Belarus because of a $500m debt after Minsk failed to pay in full for previous shipments.

The Russian firm later postponed the deadline for Belarus to repay the debt after a first instalment was paid.

Like Belarus, Ukraine was forced to start paying more for its Russian gas in 2006, after a dispute which saw Gazprom reduce supplies, leading to a knock-on reduction in gas passing through the country to western Europe.

This row sparked concern within European Union nations about their energy security and the future reliably of Russian gas, which now accounts for much of European requirements.

Moscow denies accusations that it uses gas supplies to bully its neighbours.

Instead, it insists that price rises last year for Belarus, Ukraine and Georgia merely reflect the end of Soviet-era subsidies.