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Ukraine starts paying its bills

Ukrainian state energy company Naftogaz has started paying off outstanding debts for Russian gas supplies and said it hoped all arrears would be settled "within hours".

"We have started the procedure of paying off debts for November-December and hope to complete it within a few hours," a spokesman for the company told Reuters by telephone.

A government order made public earlier said it had authorised Naftogaz to borrow up to $2 billion from state banks to settle outstanding debts as talks on 2009 gas supplies and prices proceeded in Moscow.

However, Russian gas export monopoly Gazprom said it had not yet received money from Ukraine after Kiev said it had fully repaid its arrears for gas deliveries to Russia.

"We don't see the money yet. It is too early to talk about debt repayment," Gazprom's spokesman Sergei Kupriyanov told Reuters.

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