Ukraine's cash-starved government says it has asked parliament to approve a law granting the cabinet "the right, if necessary, to stop payments to foreign debt holders."

In a statement on May 19, the government said, "In case of an attack by unscrupulous creditors on Ukraine, this moratorium will protect state assets and the state sector."

The move comes as Kyiv is trying to reach a deal with creditors by next month that would save it $15.3 billion over the coming four years and avoid default.

A successful agreement would guarantee the release of the next instalment of a $17.5 billion International Monetary Fund loan.

But the talks have soured over the past week, as bondholders repeated objections to any write-down on the principal owed.

Based on reporting by Reuters and AFP