Ukraine has settled a commercial dispute with Russian gas firm Gazprom, averting the risk of having its most important supply of energy cut off. The Russian firm had threatened to stop supplying its neighbour unless a $1.3bn (£650m) bill was paid this month.
But the two parties said they had reached a solution and would conclude an official agreement on Tuesday. Previous disputes between the two have seen gas supplies to Ukraine stopped, with a knock-on effect across Europe.
Uneasy relationship
The European Commission had called for a "speedy solution" to the latest dispute after a similar row in early 2006 saw supplies to parts of central and western Europe interrupted.
The breakthrough came during a meeting between Ukrainian energy minister Yuriy Boiko and senior Gazprom executives. "The sides agreed a scheme for paying off the debts of economic entities of Ukraine for the gas supplied this year," Gazprom said in a statement.
The dispute surrounded the payment of debts by Kiev relating to previous gas deliveries. The timing of Gazprom's escalation of the dispute, coming two days after parliamentary elections in Ukraine saw supporters of pro-western President Viktor Yushchenko emerge in front, provoked claims of political manoeuvring.
Moscow has repeatedly denied 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.
(BBC News)