Belarusian President Alexander Lukashenko, while reluctantly agreeing to empty government reserves to pay Gazprom, angrily accused Russia of attempting to take over Belarusian companies and "privatize the whole country."

Russia, which provides for a quarter of Europe's gas needs, pumps its gas to the continent through a vast network of pipelines passing through Ukraine, and to a lesser extent Belarus. The pricing dispute provoked fears of another supply interruption in the European Union, reminiscent of a gas spat between Gazprom and Kiev at the beginning of last year.

Moscow, which has traditionally backed Lukashenko despite his pariah status in the West, providing Belarus with heavily-subsidized fuel, signaled a departure from its policy last year. In December the countries signed a contract on natural gas supplies to Belarus and Europe-bound deliveries transited via Belarus in 2007-2011, under which Russia increased the gas price to Belarus from $46.68 per 1,000 cubic meters to $100 as of 2007.

While still less than half the average price Gazprom charges EU states for its gas, the price hike and promises of future increases dealt an unwelcome blow to the Belarusian economy.

Gazprom pays some $30 million a month for gas transit through Belarusian pipelines. In late December, the countries signed a protocol allowing Gazprom to acquire a 50% stake in Beltransgaz for $2.5 billion in installments over four years. Gazprom has so far paid $625 million for a 12.5% stake in the Belarusian pipeline operator.

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