By Roman Olearchyk in Kiev and Stefan Wagstyl in London
Vladimir Putin, Russia's prime minister, on Thursday announced that Moscow would go easy on Ukraine in enforcing the terms of their bilateral gas deal, in a surprise sign of improving relations between Moscow and Kiev.
The Russian leader said Gazprom, the Russian state-controlled group, would not impose penalties on Ukraine for failing to buy as much gas as it promised when the contract was signed in January, after a dispute that disrupted Russian gas supplies to the European Union.
The gesture may ease international fears concerning Ukraine's econ¬omic and political stability.
Russia, which has put unremitting pressure on Ukraine since Kiev swung to the west after the 2004 Orange Revolution, seems to be acting out of concern that further political or economic assaults could push Ukraine into chaos.
While Moscow would hate to see a west-oriented democratic Ukraine succeed, it does not want a complete collapse on its frontiers, with unpredictable consequences for Russia.
Anders Aslund, senior fellow at the Peterson Institute, a US think-tank, said: "Previously, Russian policy was to destabilise Ukraine. Now it is changing."
Mr Putin said: "Ukraine is not taking the contracted volumes [of gas] and should pay fines. We will forgive these fines because we recognise the reality: they have nothing to pay with. They are in a pre-bankruptcy state, and you perfectly understand that you cannot finish off your partners."
Naftogaz, Ukraine's state gas company, welcomed the news as "pragmatic".
In Ukrainian political circles, Mr Putin's move was seen as a favour to Yulia Tymoshenko, the prime minister, who has tried hard to harmonise relations with Moscow without compromising links with the west.
Moscow seems to be focusing its support on Ms Tymoshenko in advance of presidential elections this year, at the expense of Viktor Yushchenko, the president, and Viktor Yanukovich, opposition leader, who it backed in the Orange Revolution but who it now sees as ineffective.
Vadym Karasyov, a Yushchenko adviser, said that by waiving the fines, "Mr Putin showed favour for Ms Tymoshenko and her presidential candidacy".
But the president's aides worry that Ms Tymoshenko may pay a high price. They fear that with Ukraine needing financial support on top of its recently agreed International Monetary Fund programme, she may make concessions to Moscow.
Mr Yushchenko also seems to have lost influence over the gas trade. Mr Putin and Ms Tymoshenko agreed in January to exclude intermediaries including Rosukrenergo, a company jointly owned by Gazprom and Dmitry Firtash, a Ukrainian businessman. Mr Putin's move may signal that he and Ms Tymoshenko can manage the gas trade effectively without intermediaries.