Russia had halved Ukraine's gas supply in a dispute over debts

Gazprom had cut supplies to Ukraine by half this week, in a dispute over Ukraine's debts to Gazprom (£770m) and a new contract.

The dispute raised concern that gas supplies to Europe would be hit as much of its supply passes through Ukraine.

But Naftogaz said that supplies to Europe had not been interrupted by its disagreement with Gazprom.

The chief executives of the two companies held talks on Wednesday to hammer out a deal.

"Today Gazprom CEO Aleksey Miller and Naftogaz Ukrayiny CEO Oleh Dubyna held talks by telephone, in the course of which agreements have been reached to resolve the crisis with the supply of gas to Ukraine," Gazprom spokesman, Sergey Kupriyanov, said on Russian television.

Ukraine has agreed to pay for gas supplies for January and February of this year.

But Gazprom said talks continued on other issues.

Gazprom cut supply twice this week, first on Monday by 25% then again by 25% on Tuesday.

A previous row between the two sides saw Russia cut gas to Ukraine in 2006. It also hit exports to Western Europe and affected diplomatic relations between Brussels and Moscow.