Europe receives about a fifth of its gas through pipelines which pass through Ukraine, and Moscow said the flows should be unaffected by the cut-off - unless Kiev starts illegally diverting the gas.

Energy companies in Germany, France, Poland, Romania, Austria and Italy said yesterday they had not yet seen any drop in supply. Europe has enough gas stockpiled to manage without Russian gas for several days, though not weeks, analysts said.

After both the European Union and the US urged a quick solution to the row, Ukraine said its negotiators would fly to Moscow to resume talks that broke down on New Year's eve, but there was no confirmation they had arrived.

The row could raise new doubts about Moscow's reliability as an energy supplier and fuel suspicions in the West - already running high since Russia's war with Georgia last August - that the Kremlin bullies its pro-Western neighbours.

Though Russia claims the gas dispute is purely commercial, the two ex-Soviet neighbours have clashed angrily over a drive by Ukrainian President Viktor Yushchenko to take his country into the Nato alliance.

If talks between Naftogaz and Gazprom do resume, the gulf between their negotiating positions is wide.

Kiev said it is prepared to pay a maximum of $235 per 1000 cubic metres of gas this year while Gazprom boss Alexei Miller said late last night he wanted $418 per Mcm. Until the talks broke down, Gazprom has been offering a price of $250 per Mcm.

There are also disputes over the amount Russian will pay for the right to ship its gas to Europe via Ukraine, and the $2 billion Gazprom says it has still not received from Kiev in gas arrears.

The EU is keen to avoid a repeat of a January 2006 row when Moscow cut off supplies to Ukraine, causing a brief reduction in gas deliveries to other parts of Europe in mid-winter.

Russian gas export monopoly Gazprom said it was watching for signs that Ukraine was siphoning off gas destined for customers in Europe.

The company said its engineers were monitoring pipeline pressure at a pumping station in Slovakia, just to the west of the Ukrainian border, and would be able to say if any gas was going missing later today.

"At the moment it cannot be assessed whether (Russia's actions) will also bring a supply reduction to central and western Europe," Austrian player OMV said in a statement.

"Experts ... are watching the development of the situation."

Russia has dismissed questions about its reliability as an energy supplier. It said it has offered to sell Ukraine gas at below market rates and that infighting between factions in Kiev has hindered efforts to seal a deal, a Reuters report said.

Ukraine's state energy player Naftogaz said it guaranteed uninterrupted supplies of Russian gas to Europe and that it was drawing gas from underground stockpiles to meet its own needs.

But it said it was diverting 21 million cubic metres of gas a day - or about 6% of the volumes flowing to Europe - to maintain pressure in the pipeline network, a step Gazprom could interpret as illegal siphoning.

A protracted row is likely to hurt the Ukrainian economy, already reeling from a drop-off in investor confidence and steep falls in the hryvnia currency that have not been stemmed by an International Monetary Fund loan.

Ordinary Ukrainians, accustomed to dire relations with Moscow, seemed resigned.

Alexander, a middle-aged man on a Kiev street, told Reuters: "This is all politics: they (the Russians) just decided to do this from the start of the New Year and probably in a month or so everything will simply resolve itself."

Published: 02 January 2009 09:30 GMT  | Last updated: 02 January 2009 09:30 GMT