EU nations have started to feel the impact of Russia's decision to cut its gas supplies to Ukraine.

Russia's state-run firm Gazprom cut Ukrainian supplies by a quarter after Kiev refused to sign a new contract seeking a 400% price increase.

Hungary and Poland were the first EU states to have supplies disrupted.

Russian gas is piped through the Ukraine and the drop in pressure means less gas will be available to be pumped through to EU countries.

Earlier today, Ukraine's state energy company Naftogaz confirmed it had registered a reduction in gas supplies from Russia.

Ukraine's emergency situations ministry said a special crisis centre had been set up to deal with the effects of the reduction.

An energy ministry official said three plants providing heating for homes in the regions of Donetsk and Kharkov in eastern Ukraine had been warned about possible cuts in supplies.

'They need to be ready to replace gas by coal and only use a small amount of gas to improve incineration,' the official said.

Ukrainian Prime Minister Yury Yekhanurov said last week that Ukraine should be 'ready for any cataclysm' but insisted 'the people will feel nothing'.

Ukrainian officials said large industrial enterprises in Donetsk and Odessa might face disruption but ordinary people would not feel the effects of the cuts because Ukraine could fall back on underground reserves and alternative sources of gas.

Ukraine currently consumes an average of 283 million cubic metres of natural gas per day, with 60 million produced in Ukraine, 118 million coming from the Central Asian state of Turkmenistan and the rest from Russia, according to official figures.

Mr Yekhanurov also said his country had a contractual right to take 15% of the gas transiting Ukraine's territory on its way to western Europe - a possibility that has raised concern in Europe, which imports 20% of its natural gas needs from Russia via Ukraine.