Ukraine's energy minister says Russia has cut off all natural gas supplies to his country, adding however that he guarantees reliable gas flows will continue to Russia's European clients who get imports through pipelines via Ukraine.
Ukraine faced the threat of Gazprom, the Russian natural gas producer, cutting off supplies when a 06:00 GMT deadline passed on Monday after talks on a long-running gas-pricing dispute failed to produce a breakthrough.
"We have an announcement to make today that gas supplies to Ukraine have been reduced to zero," Yuri Prodan, the energy minister, said in Kiev.
Gazprom said it was not extending the deadline for Ukraine to start paying off its gas debts after the discussions ended in the early hours of Monday morning in Kiev.
The outcome is likely to increase political tensions that have mounted in the past few days between Ukraine and Russia as Ukrainian government forces clashed heavily with pro-Russian separatists in east Ukraine. Russia says Ukraine has a total of more than $4bn in gas debts.
"The Russian side is expecting payment of the accumulated gas debt of $1.95bn before 10am [06:00 GMT] on June 16," Sergei Kupriyanov, Gazprom spokesman, said earlier.
"If the funds are not paid, gas supplies will, as was announced earlier, be switched to a pre-payment system."
Guenther Oettinger, the European commissioner for energy, said in Kiev that he had made a compromise proposal during the talks, which resumed late on Sunday, but Russia had declined the offer.
Meanwhile, Ukrainian state gas company Naftogaz said it had filed a lawsuit at the Stockholm arbitration court to try to recover $6bn in what it said were overpayments to Gazprom.
Earlier, Gazprom said it filed a case at the same institution to try to recover Ukraine's more than $4bn debt for gas.
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The impact of gas-supply cuts would not initially be huge because it is summer and Ukraine and the EU have enough gas in storage to cope, but each would fear cuts in the winter.
Western countries had seen the talks as a gauge of President Vladimir Putin's willingness to compromise in Russia's political crisis with Ukraine, which has pushed relations with the West to their worst level since the Cold War ended.
However, relations deteriorated further last week, with Ukraine accusing Russia of arming the separatists with tanks, protesters attacking Russia's embassy in Kiev and the rebels shooting down a military plane, killing all 49 personnel on board.
Tensions were already high following Russia's annexation of Crimea after Viktor Yanukovich, the pro-Moscow president, was toppled and pro-Western leaders took over power.