Russian President Vladimir Putin has warned Ukraine against defaulting on its gas debts, saying Moscow cannot supply Kiev with free natural gas for good.

"Up until now, as I have already said, we were supplying Ukraine for free with more gas than the total consumption and our annual gas supplies to a country like Poland. This situation cannot continue forever. This is simply not possible and everyone understands this," Putin said in televised remarks at Wednesday's cabinet session.

He added that Ukraine should first pay for the supplies and then receive them, in case of failing to clear its debt.

"I hope we won't get into the situation when we will be forced to switch to prepayments," he said.

Putin, however, expressed hope that the gas row would be settled soon.

According to Russian Energy Minister Alexander Novak, Ukraine must pay $2 billion before Friday and another $500 million before June 7.

Meanwhile Alexey Miller, the CEO of Russia's energy giant Gazprom, also warned that Moscow would limit the gas supplies to Ukraine by June 3, if Kiev defaults on its debt payments.

Miller said that Ukraine consumed some $1.7 billion worth of gas in May. The consumption will raise Kiev's total gas debt to $5.2 billion by June 7.

Kiev refuses to pay for Russian gas at the price of $485 dollars per 1,000 cubic meters, demanding a discount before it clears its debts.

SS