Gazprom has cut off gas supplies to Ukraine after last minute negotiations failed and the company could not extract a signature from Ukraine for gas on competitive European rates, although a statement from the Russian gas compay said Naftogaz Ukrainy never had "permission" to sign a new contract.

"It is not quite appropriate now to discuss possible gas price levels over the radio," said Gazprom spokesman Sergey Kupriyanov, adding the Russian side was urging talks, but the Naftogaz delegation hadn’t arrived.

"There haven’t been any signals from the Ukrainian side,” he said.

After renewing supplies to Uzbekistan and Turkmenistan on new rates in-line with Europe's, the company turned of the taps on New Year's Day with Ukraine still asking for lower rates.

"At the moment we don’t have a contract for gas supply to Ukrainian consumers," Gazprom spokesman Sergey Kuprianov said.

The second day of a January marked 24 hours with no supplies from Russia, and on Thursday Ukrainian gas company Naftogaz had to dip into its strategic storage.

Kuprianov said flows to Ukraine had been cut 100 percent, or by 110 million cubic meters of gas a day. Supplies to Europe, especially to German and French utilities, had been increased by 20 MM cubic metres per day.

"In effect, our disagreement over the gas prices is not the main problem," Kuprianov said.

"The problem is that the Naftogaz Ukrainy delegation simply had no mandate for signing a new contract," he said, implying Kiev may have had a political hand in the gas power play.