End in sight to gas dispute

An end to the gas supply crisis in Europe appeared to be close tonight after Russia vowed to restore full services once observers are in place to check flows through Ukraine.

The delegation of official monitors, to be dispatched by the EU, could be in place in two days, effectively policing a row in which Russia's state-controlled gas company Gazprom has accused Ukraine's Naftogaz of siphoning off supplies intended for elsewhere in Europe.

About 80% of EU-bound gas from Russia comes via Ukraine which has denied Gazprom's accusations that they have refused to pay its gas supply bills.

Today's breakthrough came after a flurry of diplomatic activity in Brussels with Russian and Ukrainian gas company chiefs and politicians meeting European Commissioners and Euro-MPs.

Ukraine insisted it had paid all its bills for 2008 and did not deserve to have the gas tap turned off, which Russia did last week.

Ukraine also denied hiving off transit supplies heading for the EU to make up for its own shortfall.

Russia, meanwhile, insisted Ukraine was to blame for the knock-on effect which has halted all gas supplies from Russia to seven EU member states.