(AFP) A delegation from Ukraine's state gas company Naftogaz is to hold talks Tuesday in Moscow with Russian energy giant Gazprom on clearing Ukraine's massive gas debt, a government source said.

"The negotiations will take place on Tuesday and Wednesday," said the source, who asked not to be named.

The Russian company says Naftogaz owes some 2.4 billion dollars (1.9 billion euros) and has warned of potentially crippling gas cuts if the debts are not paid. Ukraine disputes some of the penalties imposed for late payment.

Kiev agreed last week to pay the debts owed for September and part of those owed for October by December 1. Gazprom has said part of this sum has now been paid back but not the full amount required.

Gazprom has also warned that it could raise the price to 400 dollars per 1,000 cubic meters -- more than double what Ukraine pays now -- if the debt is not paid.

Currently Ukraine pays Russia 179.5 dollars for 1,000 cubic metres of gas, much less than what European Union countries pay. A sharp rise would be bad news for Ukraine's economy, which has been hit hard by the financial crisis.

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