MOSCOW - RUSSIAN energy giant Gazprom on Tuesday said Ukraine is blocking the flow of gas to a freezing Europe, just hours after it was announced that supplies had been switched back on.

With factories closed and thousands of homes without heating in the depth of winter, respite looked imminent Tuesday after the European Union brokered a deal to end a bitter energy dispute between Moscow and Kiev. The EU had arranged the deal after Moscow accused Ukraine of stealing gas bound for Europe, an allegation vehemently denied by Kiev.

On Tuesday morning, Gazprom said Russia had begun pumping gas at a rate of 76.6 million cubic metres a day, roughly a quarter of the level prior to the crisis. Russian officials said then that the amount would be quickly raised to normal levels as soon as international monitors confirmed that none of the gas passing through Ukraine had gone missing.

But just four hours later, Gazprom's deputy chief executive officer Alexander Medvedev notified the European Commission of Ukraine's 'unreasonable' actions in allegedly diverting some of the restored supplies for its own domestic use and shutting down an export corridor. 'The door is closed as before,' Mr Medvedev said. 'We did not close the door. We are doing our utmost to resume flows to our customers. Unfortunately we can't transit gas physically through Ukraine.'

Ukrainian state energy company NAK Naftogaz Ukrainy responded by saying there was not enough pressure in the pipelines to pump gas.

Ukrainian energy adviser Bohdan Sokolovsky also said Russia had deliberately shipped the gas along a technically arduous route that requires Ukraine to cut domestic consumers out before it can deliver gas to the Balkans. 'They are continuing their campaign to discredit Ukraine,' he said.

But while the two sides continued to trade accusations, the EU said 'little or no' gas was flowing to the 27-nation bloc through Ukraine. 'This situation is obviously very serious and needs to improve rapidly,' an EU spokesman said.

In a sign that what had begun as a simple price dispute between the two ex-Soviet neighbours could escalate into a full-blown diplomatic row, Mr Medvedev suggested that the United States was encouraging Kiev's defiance, saying the Ukrainians may be 'dancing to the music which is being orchestrated not in Kiev but outside the country'.

Meanwhile, hundreds of thousands of people across Europe remain without gas supplies, and factories and schools have been closed in some countries to save energy. Even before yesterday's developments, EU officials had voiced impatience over the crisis at talks in Brussels on Monday.

Russia first reduced supplies on New Year's Day, and these were cut to zero last week, hitting many EU member states at a time of bitter cold.

European Commission chief Jose Manuel Barroso, who yesterday called Russian Prime Minister Vladimir Putin to express 'disappointment' over the lack of gas flow, had on Monday said: 'We cannot accept further delays, further excuses that keep European citizens in the cold.'

EU energy ministers also concluded in a meeting in Brussels on Monday that the bloc needed to increase investment in energy infrastructure to reduce its dependence on Russian imports. 'Europe is totally short-sighted about its joint energy policy,' lamented Italian Energy Minister Claudio Scajola. 'It should not be dependent on people who can bring a country to its knees by turning off the taps.'

The EU gets about a quarter of its gas from Russia, with 80 per cent of that passing through Ukraine.

AGENCE FRANCE-PRESSE, BLOOMBERG, ASSOCIATED PRESS

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CAPTIVE

'Europe is totally short-sighted about its joint energy policy. It should not be dependent on people who can bring a country to its knees by turning off the taps.'

Italy's Energy Minister Claudio Scajola