Ukraine faces supplies threat from Gazprom

Russian energy giant Gazprom was tonight threatening to cut off gas supplies to Ukraine as it unveiled an 85% jump in first-half profits to £14.2 billion.

Gazprom, chaired by Dimitry Medvedev until he became Russian President this year, said it was still talking to the Ukraine government about unpaid debts and damages of around £1.4 billion ahead of the 1 January deadline.

The firm cut off supplies to Ukraine in January 2006 in a similar dispute, sparking a major row and raising fears over UK reliance on foreign gas supplies.

Results from Gazprom, the world's largest gas producer, today showed how much it profited from the peak in energy prices over the summer. Profits almost trebled from April to June. However, revenues are set to tumble as prices have slumped since and Gazprom is heavily indebted.

It said today it took out loans of $403 million (£279 million) in the last two months.