Angry anti-government protesters in Ukraine toppled a statue of former Soviet leader Vladimir Lenin in the centre of Kyiv on Sunday and blockaded key government buildings amid huge street protests, raising the stakes in an escalating standoff with President Viktor Yanukovych.

The biggest protest in the former Soviet republic since Ukraine's pro-democracy Orange Revolution in 2004 led the government to fire back. It announced an investigation of opposition leaders for an alleged attempt to seize power and warned the demonstrators they could face criminal charges.

The West pressed for a peaceful settlement.

Hundreds of thousands of Ukrainians flooded the centre of Kyiv, the capital, to demand Yanukovych's ouster after he ditched ties with the European Union in favour of Russia and sent police to break up an earlier protest in the nearly three-week standoff.

Vitali Klitschko, chairman of the Ukrainian opposition party Udar (Punch) and WBC heavyweight boxing champion, speaks to pro-EU activists in Independence Square on Sunday. (Alexander Zemlianichenko/Associated Press)

"Ukraine is tired of Yanukovych. We need new rules. We need to completely change those in power," said protester Kostyantyn Meselyuk, 42. "Europe can help us."

Packing Independence Square as far as the eye could see, Ukrainians waving EU flags sang the national anthem and shouted "Resignation!" and "Down the with gang!" in a reference to Yanukovych's regime.

"I am convinced that after these events, dictatorship will never survive in our country," world boxing champion and top opposition leader Vitali Klitschko told reporters. "People will not tolerate when they are beaten, when their mouths are shut, when their principles and values are ignored."

As darkness fell, the conflict escalated further with protesters blockading key government buildings in Kyiv with cars, barricades and tents.

Lenin statue decapitated

The protests have had an anti-Russian component because Russia had worked aggressively to derail the EU deal with threats of trade retaliation against Ukraine.

About a kilometre from the main square, one group of anti-government protesters toppled the city's landmark statue of Lenin and decapitated it Sunday evening.

Protesters then took turns beating on the torso of the fallen statue, while others lined up to collect a piece of the stone. The crowd chanted "Glory to Ukraine!"

"Goodbye, Communist legacy," Andriy Shevchenko, an opposition lawmaker, wrote on Twitter.

The demonstrations erupted last month after Yanukovych shelved a long-planned treaty with the 28-nation EU to focus on ties with Russia. They were also galvanized by police violence and fears that Yanukovych was on the verge of bringing his country into a Russian-led economic alliance, which critics say could end Ukraine's sovereignty.

Pro-EU activists shout slogans during a rally in Independence Square in Kyiv. (Ivan Sekretarev/Associated Press)

"It's not just a simple revolution," Oleh Tyahnybok, an opposition leader with the national Svoboda (Freedom) party, told the crowd in a fiery speech from a giant stage. "It's a revolution of dignity."

Yet a solution to the crisis appeared elusive, with the government making no concessions and the opposition issuing contradictory statements on how to proceed.

Heeding the opposition's calls, thousands of protesters blocked the approach to key government buildings in Kyiv by erecting barricades, setting up tents and parking vehicles, including a giant dump truck.

"We are extending our demonstration. We are going to fight until victory. We will fight for what we believe in," opposition leader Arseniy Yatsenyuk told protesters on Independence Square, which was drowning in a sea of flags.

West call for peaceful settlement

The West, meanwhile, scrambled to avoid violence and urged dialogue.

In a phone conversation with Yanukovych, European Commission President Jose Manuel Barroso stressed "the need for a political" solution and dispatched EU foreign policy chief Catherine Ashton to Kyiv next week to mediate a solution. Yanukovych also discussed the crisis with UN Secretary-General Ban Ki-moon.

Valery Chaliy, head of the Razumkov Centre think tank in Kyiv, said the West must help resolve the crisis and prevent more violence. "It is evident that without international mediation this will not be solved in a peaceful way," Chaliy said in a telephone interview.

The protest Sunday in sub-zero December temperatures took place on Independence Square, known as the Maidan, in an echo of the Orange Revolution. Those protests annulled Yanukovych's fraud-tainted presidential victory in 2004, and ushered his pro-Western opponents into power. Yanukovych returned to the presidency in the 2010 vote.

During a huge demonstration a week ago, several hundred radical protesters hurled stones and attacked police as they tried to storm the presidential office. That prompted a violent breakup by the authorities in which dozens were beaten and injured, including peaceful protesters, passers-by and journalists.