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Navigation Primary Navigation Home Singapore Asia Pacific World Business Entertainment Sports Technology Top Stories Most Popular Secondary Navigation Africa Europe Latin America Middle East North America Search Search: Clock ticks as Ukraine gas standoff unresolved AFP - 2 hours 7 minutes ago MOSCOW (AFP) - - Russia and Ukraine on Wednesday failed to make any headway in resolving their gas dispute as the clock ticked down to a midnight deadline that would see Moscow cut gas to its pro-Western neighbour. Amid concerns the dispute could see a repeat of a similar crisis in 2006 when supplies to Europe were affected, Russian Prime Minister Vladimir Putin warned Ukraine of "severe consequences" if it disrupted gas supplies to Europe. Russian energy giant Gazprom has warned it will cut supplies from 0700 GMT on Thursday if no agreement was reached by midnight (2100 GMT) on a 2009 contract and Ukraine's debts. In a dramatic move ahead of the New Year deadline, Gazprom produced a letter which it said contained a warning from state Ukrainian gas company Naftogaz that Kiev could disrupt the transit of Russian gas being delivered to Europe. Putin responded in his trademark uncompromising style. Any move by Ukraine to disrupt supply of Russian gas to Europe would violate its contractual obligation and would constitute "a completely different matter with very severe consequences for the transit country," Putin said. "Not only in its relations with Russia, as the exporter, but also with consumers in EU countries," he added in a televised meeting with President Dmitry Medvedev. He also ridiculed Ukraine's leaders -- who are seeking EU and NATO membership -- for their "inter-clan fighting" and sniped that its economy was in a "pre-default situation." The authenticity of the letter alleged by Gazprom to have been sent by Naftogaz could not be independently verified. Ukraine's political leaders and Naftogaz officials have made no such threat in public. They did not however deny Wednesday the contents of the Naftogaz letter. A source at Gazprom told AFP that last-ditch talks were still continuing late Wednesday with Naftogaz head Oleh Dubina, rejecting reports that he had headed back to Kiev. Gazprom deputy chairman Alexander Medvedev said earlier the threat to cut supplies had come in a letter sent by the Ukrainian state gas company Naftogaz in the course of 11th-hour negotiations in Moscow. "We are in a situation when transit volumes to western Europe are in danger," Medvedev said at a news conference. "This position cannot be called anything but blackmail." The developments were the latest twists in a saga of dizzying complexity, which only Wednesday morning appeared to be heading towards a peaceful resolution after Ukraine partially paid off its debts. Putin added that Russia had also offered Kiev a price for gas next year -- 250 dollars (179 euros) per 1,000 cubic metres -- below European prices on account of the economic crisis in Ukraine. But the office of Ukrainian President Viktor Yushchenko dismissed the offer as "unacceptable," as long as the charges for the transit of Russian gas across Ukraine were not lifted. Eighty percent of Russian gas supplies to the European Union pass through Ukrainian territory. Ukraine's leadership and top Naftogaz officials have so far publicly asserted that Kiev will guarantee Russian gas shipments to Europe. Gazprom chief executive Alexei Miller said there should be "no doubt" that supplies to Ukraine would be halted at 10:00 am Moscow time (0700 GMT) on New Year's Day if no new deal were reached by midnight. A spokesman for Naftogaz, Valentin Zemlyansky, was defiant, saying Ukraine would make no last-minute payments relating to the crucial issue of fines for late payments. Analysts say the situation differs from a New Year gas conflict between Ukraine and Russia two years ago that briefly disrupted supplies to the European Union, as both Ukraine and the EU have large gas reserves in store. But a European Commission spokeswoman confirmed that EU Energy Commissioner Andris Piebalgs had been in talks with both sides "encouraging them to find a negotiated solution." Gazprom says Ukraine owes 1.6 billion dollars for gas it imported in November and December. Ukraine never disputed those arrears, yet late Tuesday transferred just 1.5 billion to an account for payment to Gazprom. Naftogaz did not explain the 100 million-dollar shortfall. Gazprom has also demanded payment of 450 million dollars in penalties for late payment of the November-December shipments. EU countries are heavily reliant on Russia for their natural gas supplies -- around one quarter comes from Russia, which possesses the world's largest known reserves. Email Story IM Story Printable View Blog This Recommend this article Average (0 votes) Sign in to recommend this article » Most Recommended Stories » Related Articles: World Israel rejects truce call, pursues bombing GazaAP - 1 hour 20 minutes ago Russia to cut gas to Ukraine after talks failAFP - 1 hour 24 minutes ago Obama visits gym, takes photos with babyAP - 1 hour 24 minutes ago Schwarzenegger's new budget fix plan for Calif.AP - 1 hour 27 minutes ago No shoes? No problem for this college interviewAP - 1 hour 32 minutes ago Enlarge Photo Gazprom spokesman Sergei Kupriyanov shows some documents at a news conference in Moscow. Russia and Ukraine on Wednesday failed to make any headway in resolving their gas dispute as the clock ticked down to a midnight deadline that would see Moscow cut gas to its pro-Western neighbour. 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