Russian gas supplies to Ukraine will be cut off from Monday if the country fails to agree terms to settle its debts to Gazprom of $1.5 billion (£773million). The supply threat concerns additional Russian gas taken by Ukraine to make up for a shortfall of gas supplies from Central Asia. Gazprom said that the cut would represent a quarter of the country's present demand for gas.

The showdown over Ukraine's gas bill is the latest chapter in the struggle over energy supplies between the Eastern European state and its former political masters in the Kremlin. In January 2006, several European countries suffered gas shortages after Gazprom cut off Ukraine in a dispute over the introduction of market-based prices in Ukraine.

The deadline is set one day ahead of the arrival in Moscow of Viktor Yushchenko, the Ukrainian President, underlining the frosty relations between the countries. The Kremlin is unhappy about the ambition of its former satellite to join Nato and the European Union.

In Brussels, Andris Piebalgs, the European Union Energy Commissioner, said that Gazprom had given assurances that supplies to the EU would not be interrupted.

Transit pipelines through Ukraine account for 80 per cent of Gazprom's exports to the EU.

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