Russia restores gas supplies to the West

Europe's gas supply was returned to normal yesterday as Russia limited the external fallout of its price row with neighbouring Ukraine, but the political crisis appeared far from over and the two countries showed no signs of reining in their increasingly acerbic rhetoric.

The crisis erupted when Ukraine refused Russia's request to pay $230 (£130) per 1,000 cubic metres of gas, up from $50 (£30) last year, and Moscow retaliated by cutting off Ukraine's gas supply on New Year's Day.

Germany, Austria and Italy, which rely heavily on Russian gas, felt the pinch as there was a dramatic drop in pressure in the pipelines that supply them with energy, which cross Ukraine.

Russia claimed the shortfall was a result of Ukraine stealing gas meant for its European customers, an allegation Kiev continues to deny.

As the two camps prepared to resume negotiations last night for the first time since talks collapsed in the dying days of 2005, Moscow warned Europe of further possible disruption to gas supplies. Russia's state gas monopoly, Gazprom, is pumping around 100 million cubic metres of extra gas through Ukraine's pipeline system to compensate European customers for the gas it believes is being stolen. But yesterday it warned such a situation was "untenable" commercially and could not go on for more than a few days. That raises the spectre of further shortages in Europe, which relies on Russia for a quarter of its natural gas needs, if a compromise is not quickly found.

European Union energy experts are due to meet in Brussels today to discuss the 25-nation bloc's response, hours after Gazprom officials were due to meet their Ukrainian counterparts in Moscow last night to try to hammer out a solution.

Emotions are running high, with no love lost between the Russian President, Vladimir Putin, and the Ukrainian President, Viktor Yushchenko, who came to power in an "orange revolution" at the end of 2004 which badly dented Russia's centuries-old influence in Ukraine. Mr Yushchenko argues that the nearly fivefold price increase is politically motivated and is meant to cast him in a bad light before parliamentary elections in March. Moscow insists that the price hike is purely commercial, and says it is sick of subsidising Ukraine.

Alexander Medvedev, deputy chief executive of Gazprom, said: "The real surprise is the kind of statements and behaviour we see from the Ukrainian side. It is more ... [appropriate] for gangster films than civilised society."

In the Ukrainian Black Sea port of Odessa, controlled by Mr Yushchenko's Our Ukraine, party activists said the Russian tactics were playing into their hands. "Nobody has done more for Ukrainian nationalism than Putin," an unnamed party strategisttold The Independent. He said the Russians had made "a huge mistake by leaving us with no choice" over the price rise. Mr Yushchenko, whose popularity has been flagging, "has started to look tough, firm and courageous, even to Ukrainians in the eastern [Russian-speaking] regions".

Sitting in Odessa's city hall, Eduard Scheglov, head of the information department, argued that Russia has long used energy as a weapon of political influence against Ukraine and its other former Soviet vassals. Odessa's main electricity supplier is Russian-owned and Mr Scheglov said it was suspected of deliberately causing massive power outages to entire districts and state facilities from schools to hospitals in order to discredit the city's "orange" rulers.

"They claim the blackouts are accidents but we have no doubt that someone has given them an order to turn off supplies at the height of winter so as to turn people against the authorities," he said.