(MOSCOW) - Russian energy monopoly Gazprom restored gas supplies to Ukraine on Wednesday, ending a three-day crisis between the two ex-Soviet neighbours that has put the European Union on alert.

"Transit of Russian gas through Ukraine for European consumers is at full volume. Limitations on supplies for Ukrainian consumers have been lifted," said a joint statement by Gazprom and Ukraine's state energy company Naftogaz.

The deal came after a telephone conversation between Russian President Vladimir Putin and his Ukrainian counterpart Viktor Yushchenko, as well as the leaders of Gazprom and Naftogaz, the statement said.

"Agreements were reached on resolving the crisis situation," Gazprom and Naftogaz said, adding that negotiations on the debt dispute would continue and outstanding issues "will be resolved."

Gazprom cut supplies to the Ukrainian domestic market by 25 percent on Monday and by an additional 25 percent on Tuesday in a bitter row with Ukraine over unpaid debts and the existing system of payments for Russian gas.

Just hours before the announcement, Gazprom had accused Ukraine of planning to divert 60 million cubic metres of gas a day bound for customers in the European Union, or around a fifth of total supplies across Ukraine to the EU.

At a news conference in Kiev, a defiant Ukrainian Prime Minister Yulia Tymoshenko, who has also taken a leading role in the politically charged dispute with Russia, firmly denied any such intention.

Naftogaz on Tuesday had said it could be forced to divert gas bound for Europe as a last resort if Russian gas cuts continued. That prompted the European Union to call an emergency internal meeting for March 11.

Ukraine is the main transit route for Russian gas supplies to EU states and the European Union, which relies on Russia for a quarter of its gas supplies, has repeatedly called on Moscow and Kiev to resolve their current dispute.

This week's stand-off has renewed memories of a 2006 dispute in which Russia cut off all of Ukraine's gas supplies, leading to disruptions in several EU countries and sparking fresh debates about Europe's growing reliance on Russia.

The row centres on a demand by Gazprom that Ukraine settle a debt of 600 million dollars (395 million euros) but also concerns the system of payments through intermediary companies that Ukraine would like to see abolished.

Yushchenko and Putin agreed to remove such companies and replace them with new intermediaries owned jointly by Gazprom and Naftogaz at a meeting in the Kremlin on February 12 where they announced a preliminary deal on gas supplies.

But Russia has accused Ukraine of not sticking to the agreement.

Under Wednesday's deal, Naftogaz agreed to pay 179.5 dollars per 1,000 cubic meters for six billion cubic meters of gas delivered between January 1 and March 1, Naftogaz spokesman Valentin Zemlyansky told AFP.

He said talks with Gazprom would resume next week on formalizing those deliveries, which were made without contractual agreement to fill a shortfall in supplies from Central Asia.

Those talks will also focus on securing a long term cooperation accord on Russia-Ukraine gas relations, he said.

This week's brief cut off has again raised the question of Europe's dependence on Russian gas transported through Ukraine.

It will likely mean greater EU support for two Russian pipeline projects, South Stream and Nord Stream, proposed by Moscow to bypass east European transit states, energy expert Tamara Kasyanova told the Gazeta daily.

n Union, or around a fifth of total supplies across Ukraine to the EU.

At a news conference in Kiev, a defiant Ukrainian Prime Minister Yulia Tymoshenko, who has also taken a leading role in the politically charged dispute with Russia, firmly denied any such intention.

Naftogaz on Tuesday had said it could be forced to divert gas bound for Europe as a last resort if Russian gas cuts continued. That prompted the European Union to call an emergency internal meeting for March 11.

Ukraine is the main transit route for Russian gas supplies to EU states and the European Union, which relies on Russia for a quarter of its gas supplies, has repeatedly called on Moscow and Kiev to resolve their current dispute.

This week's stand-off has renewed memories of a 2006 dispute in which Russia cut off all of Ukraine's gas supplies, leading to disruptions in several EU countries and sparking fresh debates about Europe's growing reliance on Russia.

The row centres on a demand by Gazprom that Ukraine settle a debt of 600 million dollars (395 million euros) but also concerns the system of payments through intermediary companies that Ukraine would like to see abolished.

Yushchenko and Putin agreed to remove such companies and replace them with new intermediaries owned jointly by Gazprom and Naftogaz at a meeting in the Kremlin on February 12 where they announced a preliminary deal on gas supplies.

But Russia has accused Ukraine of not sticking to the agreement.

Meanwhile Russia's Gazeta newspaper quoted energy expert Tamara Kasyanova as predicting that the row would help stimulate the EU to develop alternative pipeline routes bypassing Ukraine.

This would probably mean greater EU support for two Russian pipeline projects, South Stream and Nord Stream, which are seen by Moscow as a way of bypassing east European transit states, Kasyanova said.

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