Ukraine has cleared its arrears for gas supplied by Russia`s Gazprom this year, settling a payment dispute that had raised fears in Europe of possible disruptions in supplies, Gazprom said, according to Thompson Financial.

"Today the Rosukrenergo company in full and timely fashion fulfilled the conditions of an agreement on paying the debts incurred before the Gazprom group for the gas supplied in 2007 as well as dividends on Rosukrenergo`s activities in 2006," the company said in a statement.

Rosukrenergo is the intermediary company that supplies Ukraine with gas imports.

Gazprom had earlier threatened to cut off supplies to Ukraine this winter if the ex-Soviet country did not pay a 855 mln eur debt for supplies in 2007.

Russia cut off gas to Ukraine last year during another payment row, leading to disruptions in supplies to several European countries that depend on the same pipelines running from Russia through Ukraine.

Critics have accused Russia of using gas supplies as a political weapon against Ukrainian President Viktor Yushchenko, who aims to wrest his country from Russia`s orbit and towards European Union and NATO membership.