Europe`s energy chief called on Tuesday for Russia and Ukraine to solve a recurrent dispute over gas payments of the sort that threatened gas supplies to Europe two years ago, Reuters reported.

European Energy Commissioner Andris Piebalgs is very concerned about the current dispute, a spokesman said.

"The Commissioner calls on both parties to reach a definitive agreement that solves their bilateral problems once and for all as soon as possible," he told Reuters.

A Soviet-era pipeline network transports a fifth of Europe`s gas from Russia across Ukraine, and European countries worry that a row between the two countries could cut their supplies -- as it did briefly in January 2006.

Gazprom (GAZP.MM: Quote, Profile, Research, Stock Buzz) says Ukraine owes it $2.4 billion for September-November gas supplies plus interest for late payment. Ukraine says it owes $2 billion.

The dispute is particularly worrying given its repetitive nature and the approach of winter when European gas demand soars, said the Commissioner`s spokesman.

But sufficient gas storage in Europe and Ukraine should prevent any supply crises, as well as arrangements for EU countries to help each other out in an emergency.

"Mr Piebalgs has intensified contacts with Russian and Ukrainian authorities...Commission officials are going to meet representatives of Gazprom...EU delegations in Moscow and Kiev are also in intense negotiations," he added.

Reuters