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Ukraine leader faces fresh protests after Putin talks

Anti-government protestors in Ukraine readied for fresh mass demonstrations on Sunday after embattled President Viktor Yanukovych jetted back to Kiev following private talks with his Russian counterpart Vladimir Putin.

KIEV: Anti-government protestors in Ukraine readied for fresh mass demonstrations on Sunday after embattled President Viktor Yanukovych jetted back to protest-hit Kiev following private talks with his Russian counterpart Vladimir Putin.

The late Friday tete-a-tete on the sidelines of the opening ceremony of the Winter Olympic Games in Russia's Black Sea resort of Sochi came amid intensifying pressure from the opposition on Yanukovych to cede some of his broad powers and appoint a new pro-Western government.

Neither Russian nor Ukrainian officials disclosed the details of the two leaders' conversation except to say that it was brief and held at Sochi's Fisht stadium where the Games' opening ceremony was held.

"There was no official bilateral meeting. That was not a part of (the president's) programme," a Ukrainian administration spokesman said by telephone.

Yanukovych had been expected to discuss with Putin the fate of a US$15 billion Russian bailout whose delivery has been effectively frozen pending the formation of a new government.

The ex-Soviet nation of 46 million was thrown into its worst crisis since independence in November when Yanukovych ditched an historic European Union (EU) pact under Russian pressure in a stunning reversal that sparked deadly protests.

The sustained demonstrations that followed have since then played out as a titanic struggle for the country's future between Russia and the West.

Sunday's protest is set to start at midday local time (10:00 GMT) on Kiev's Independence Square with prayers from religious leaders backing the demonstrations.

Yanukovych must now decide whether to submit to protesters' demands by taking a more conciliatory approach toward a new agreement with the European Union - a possibility that prompted Russia to suspend its loan after issuing just one instalment of US$3 billion in December.

But Ukraine's tattered economy is in ever-growing need of assistance amid sliding domestic production and dwindling foreign reserves.

Moscow is already demanding the repayment of a US$3.3 billion debt that Ukraine has piled up since last year for Russian natural gas imports on which the country's industries and households depend.

Putin's bailout would slash the future price of Russian gas imports by a third - a huge relief for the economy that analysts believe should help revive stalled growth.

But Russian Economy Minister Anton Siluanov warned on Saturday that Moscow would need at least a partial down payment on the outstanding gas bill before the terms of its Ukrainian package are restored.

"We are waiting for the Ukrainian side to meet its gas payment obligations," Interfax quoted him as saying in Sochi.

The protracted crisis has seen Ukraine's borrowing costs spike and the currency lose nearly 10 percent of its value as frightened consumers rush to stock up on dollars and euros.

Several banks have reported hard currency shortages and the central bank on Friday was forced to impose capital controls and move the Ukrainian hryvnia's official rate to 8.7 from 7.9 per dollar - its first shift of the peg since July 2012.

The global ratings agency Fitch became the latest to downgrade Ukraine's standing on Friday when it moved its long-term foreign currency debt just one step above default.

Leading Ukrainian lawmakers are expected to meet on Monday to discuss opposition proposals to slash presidential powers and return to a constitution the country had until 2010 that granted extended powers to parliament.

Yanukovych has signalled that he welcomes a discussion of the changes without committing himself to the reform.

Constitutional changes granting lawmakers the power to approve the appointment of all ministers and security chiefs are expected to be delayed until September due to stalling tactics by ruling party members.

The simmering tensions in Kiev - expected to continue on Sunday with plans for another huge demonstration on the capital's iconic Independence Square - have spilled over into verbal jousting between the European Union and Washington.

One leaked conversation that made a splash on Thursday showed Washington's European envoy Victoria Nuland using the f-word in a private conversation to disparage EU leaders' handling of the crisis.

German Chancellor Angela Merkel's office on Friday denounced Nuland's remarks as "absolutely unacceptable" - a comment echoed by European Council president Herman Van Rompuy.

But Merkel toned down her comments on Saturday by telling reporters in the East German city of Erfurt the European Union "could not dream of a better partner than the US" on the Ukraine crisis.

"We want exactly the same thing for Ukraine," she added.

The two sides' woes were compounded when a second tape emerged on Friday showing two top EU diplomats angrily discussing their differences with Washington over possible sanctions against Ukrainian leaders for their rough handling of the protests.

EU officials are expected to discuss but not adopt such measures in Brussels on Monday.

US State Department spokesman Jen Psaki denied there was a rift between Washington and Brussels over Kiev while admitting that the situation was "complex".

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