Russia And Ukraine Sign Deal Despite Protests

Russian President Vladimir Putin has slashed the cost of gas sold to Ukraine and agreed to buy billions of government bonds.

The deal comes amid massive protests in the Ukraine over the government rejecting closer ties with the European Union in favour of a new alliance with Russia.

Mr Putin agreed the deal after talks in Moscow with his Ukrainian counterpart, Viktor Yanukovych.

Protesters have been camped on Kiev's main square for nearly a month angry at the prospect of being drawn back under the influence of its powerful neighbour.

Hundreds of thousands protested in Kiev on Sunday

Opposition leaders had warned Mr Yanukovich not to bother coming back to Ukraine if he "sells out" to Russia.

The deal sees Russian state-controlled gas monopoly Gazprom cutting the price of gas deliveries from January to $268 (£165) per 1,000 cubic metres from $400 (£246) per 1,000 cubic metres.

Mr Putin also said Russia would invest $15bn ($9.2bn) in Ukraine's government bonds.

The Russian President tried to ease concerns over the deal by saying the two leaders had not discussed the idea of Kiev joining a Kremlin-led free trade bloc.

Folk singers at one of the Kiev protest camps on Tuesday

"I would like to calm everyone down, today we have not discussed the issue of Ukraine joining the Customs Union at all," Mr Putin said.

The ex-Soviet nation has been at the heart of a diplomatic tug of war between east and west since Mr Yanukovich's refusal to sign an EU trade deal last month.

The demonstrations began on November 21, but have grown in size and intensity since after unsuccessful attempts by police to clear the protest camp.

Hundreds of thousands took to the streets on Sunday in a huge rally dubbed the 'day of dignity', where they demanded the resignation of the government and called for European human rights.

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