Russia and Ukraine on Tuesday agreed to cut out a controversial Swiss-registered trading company at the heart of a dispute between the two nations, as Kiev and Moscow settled a broader deal over natural gas debts.

RosUkrEnergo – 50 per cent owned by Gazprom, the Russian state gas monopoly, and 50 per cent by two Ukrainian businessmen – has been a bone of contention between the two capitals. It won a monopoly on Gazprom’s supplies to Ukraine following a standoff over prices in 2006.