Ukraine has threatened to restrict Russian gas supplies to Europe as the row between the two countries escalates.

Gas monopoly Gazprom said it would cut Russian supplies of gas to the Ukraine by a further 25 per cent, after reducing supplies by a quarter on Monday.

The problems arose over Russian claims that Ukraine has not paid its debts. Gazprom says Ukraine owes $1.5 billion (£770 million) but the Ukraine government maintains this has been paid.

Both Gazprom and Ukraine said supplies to Europe are presently unaffected by the dispute. Almost a quarter of Europe’s gas supplies run through Ukraine pipelines.

But Naftogaz, Ukraine’s state gas company, said it reserved the right to take “appropriate” action – and disrupt supplies to Europe that transit through Ukraine – if Gazprom carried out the threatened additional cut.

“In the event that Gazprom continues blatantly to violate technical agreements between the two countries by reducing volumes of central Asian gas to Ukraine, Naftogaz reserves the right to introduce appropriate, asymmetrical actions to defend the interests of Ukrainian consumers,” the company said in a statement.

The last time Gazprom took action over gas disputes with its neighbours, in 2006, supplies to Europe were interrupted.