Russia cut off gas supplies to Ukraine on Thursday after last-minute talks about a deal for this year broke down in Moscow on Wednesday night.

Although both sides said they would guarantee supplies to western Europe, the cut has again raised fears of gas shortages in the European Union, which relies on Russian gas moved through Ukrainian transit pipelines to meet about 20 per cent of its demand. Russia’s action is the latest in an increasingly acrimonious dispute that has dogged Ukraine since 2006.