Yulia Tymoshenko on Wednesday heralded Ukraine’s deal with Russia as a “great victory” after both sides agreed to cut out a Swiss-registered middleman and settled a deal over the payment of natural gas arrears.

The Ukrainian prime minister said the agreement to eliminate RosUkrEnergo, the trading company, was “another step towards establishing order in the gas market, another step towards eliminating corruption and shadow schemes in the energy sector”. Ms Tymoshenko had long called for RosUkrEnergo, half-owned by Gazprom, the Russian state gas monopoly, and half-owned by two Ukrainian businessmen, to be axed from the Ukraine-Russia gas trade, saying it was a danger to European energy security due to its opaque ownership.