Moscow - The head of Russian gas export monopoly Gazprom said Tuesday that technical preparations had begun to shut down gas flows to Ukraine, as pressure mounts over non-payments by Kiev one day before the New Year deadline.

Gazprom Chief executive Alexei Miller told state television news Vesti-24 that negotiations to avoid the cutoffs and ensure safe flows for supplies to Europe "had ground down to mere hours."

"If up until the end of December 31, Ukraine does not make good on its debt, then there will be no basis for Gazprom to continue gas deliveries in 2009," Miller said, amid last ditch negotiations with Ukrainian officials in Moscow.

Gazprom has sent a letter of warning to European clients, launched a website and held regular press conferences to provide updates on the gas talks in an effort to reassure European clients over the security of their supplies.

The European Union relies on Russia for one quarter of its gas needs, over 80 per cent of which travels through Ukrainian territory.

In a similar dispute in 2006, Moscow blamed Kiev for siphoning off gas to European customers - sparking fuel shortages and price spikes as far away as Paris.

Ukraine is under pressure to pay back over 2 billion dollars for previous supplies.

Gazprom claims Ukraine has paid only 800 million dollars of its total debt, and analysts say the country's crushing economic problems make reimbursing of more of the debt difficult.

Gazprom spokesman Sergei Kupriyanov earlier said he was skeptical Ukraine would be able pay cash and had turned to other possible payments, such as future transit fees for gas to Europe.

Miller also added Tuesday that the market gas price for Ukraine would be 418 dollars per 1,000 cubic metres from January 1, if the two countries switch to market terms in gas trade. Kiev now pays 179.5 dollars per 1,000 cubic metres. (dpa)