This article originally appeared in The Telegraph

Ukraine’s finance minister has insisted Russia will have to take part in a private sector debt write-off, putting the embattled country on a collision course with the Kremlin.

Natalie Jaresko said there was no alternative but for her government to proceed with a $15.3bn debt restructuring programme as part of the conditions of a rescue plan from the International Monetary Fund.

“We don’t see another path right now,” said the American-born Ms Jaresko, who is visiting London in a bid to drum up western financial support for her war-ravaged country.

Russia has resisted taking any losses on a $3bn bond which is due mature in December. The debt was issued as part of a bail-out for the then pro-Moscow Yanukovych regime which was toppled last year.

But Moscow has so far maintained that it will be repaid in full, claiming it is not a private creditor and thus would not take part in any debt talks.

“It is our hope that all of our sovereign bond holders will come to the table and try and find a sustainable solution to Ukraine’s debt problem,” said Ms Jaresko.

Referring to any Russian objections to a haircut, Ms Jaresko said: “We have no intentions to discriminate on the basis of nationality or location.”

“We hope for creditor negotiations to be very transparent, we don’t see any other opportunity or path right now.”

Former fund manager and US state department staffer, Ms Jaresko joined Kiev's new technocratic government last year

Kiev needs to agree on the terms of a bond restructuring, which may include the extension of maturities and reduced interest payments, with its creditors by the end of May in order to be eligible for $17.5bn in IMF cash.

The Ukrainian government has already begun initial talks with its country’s largest private creditors including in the UK and US, said Ms Jaresko.

Relations with neighbouring aggressor Russia have deteriorated as a fragile ceasefire in eastern Ukraine has frayed.

Moscow illegally annexed Crimea last year and still has an estimated 12,000 pro-Russian troops in the Donbass region in the east of Ukraine.

The turmoil has plunged the Ukrainian economy in to its worst recession since the financial crisis.

Economic output contracted by 15pc in the last quarter of 2014, and is due to fall another 11pc in the first three months of the year. Inflation has reached 28pc as the currency has devalued by more than a third.

Ratings firm Moody's cut Ukraine's sovereign debt rating to one notch above default on Tuesday, saying that creditors would be forced to take deep losses in a debt restructuring.

"The key driver of the downgrade is the likelihood of external private creditors incurring substantial losses as a result of the government's plan to restructure the majority of its outstanding Eurobonds", Moody's said.

Ms Jaresko insisted now was the right time for creditors to take the hit, warning that bondholders “do not want to be in a situation where there is an uncontrolled situation and we are forced to do a much worse deal for them.”

Creditors face a haircut as Ukraine's perilous a debt mountain is projected to reach 98pc of its GDP at the end of this year, according to IMF forecasts.