Ukraine’s largest creditors say they are deeply concerned by the country’s declaration that it may stop making debt payments unless investors agree to a restructuring plan, as a crucial deadline looms over negotiations, the Financial Times reported. Talks between the two sides have stalled in recent weeks with both accusing the other of intransigence.

Ukraine could stop paying its sovereign creditors within weeks if they do not agree to a debt restructuring, the country’s finance minister said on Wednesday, offering a provocative option over one of the country’s economic problems amid signs of a deadlock in negotiations, the Financial Times reported. The government in Kiev and the International Monetary Fund have set the end of this month as a target to agree on a restructuring of Ukraine’s $70bn in sovereign debt aimed at saving it more than $15bn in debt payments over the next four years.

Metinvest BV’s latest proposal to restructure more than $3 billion of debt was blocked by a group of bond holders Monday, according to two people familiar with the matter, Bloomberg News reported. Ukraine’s largest steelmaker failed to gather enough votes from holders of notes that matured on May 20 to allow the company to delay payment to next year of some of the money owed, said the people, who asked not to be identified because the deal is private.

Ukraine has rejected a debt restructuring deal put forward by international creditors as the two sides struggle to break through a negotiation stalemate, the Financial Times reported. A group of investors representing just under $9bn of Ukrainian bonds, including Franklin Templeton, Ukraine’s largest creditor, this month suggested a plan to reduce the country’s debt burden by $15.8bn over the next four years — a figure that exceeds the $15.3bn targeted by the government.

Ukraine’s decision last week to grant its government the power to stop foreign debt payments marks a distinct shift in tone for the wartorn and recession-battered country. As negotiations between Kiev and its creditors stall and full-blown bankruptcy nears, the rhetoric of government communiques is shifting from conciliation to accusation. Spot the difference in sentiment. In March a presentation to investors noted that “a collaborative process is paramount . . . Ukraine is committed to undertake consultations with its creditors”. By May the government declared it “has the right . . .

Ukraine on Tuesday expressed confidence it would complete a debt restructuring to clear the way for fresh IMF aid next month after state-run Ukreximbank tied up a deal with a bondholders' committee to extend maturities on $1.5 billion of Eurobonds, Reuters reported. Near-bankrupt Ukraine is holding talks to restructure sovereign and state-guaranteed debt to plug a $15.3 billion funding gap required under an International Monetary Fund-backed $40 billion bailout programme.

Russia on Wednesday demanded the timely repayment of all debts owed to it by Ukraine and accused Kiev of effectively preparing the way for default with a new law. It threatened to take the issue to international courts if necessary. The law, approved by Ukraine's parliament on Tuesday, gives the government the right to miss payments to its international creditors as it wrangles over the terms for restructuring $23 billion worth of foreign debt. Russia holds a $3 billion Ukrainian Eurobond whose full repayment is due by the end of the year.

Ukraine’s parliament passed a bill Tuesday allowing the government to halt payments on some foreign debts, raising the stakes as a deadline looms in rescheduling talks with international creditors, The Wall Street Journal reported. The measure, approved in a 246-4 vote hours after it was first proposed, comes amid tough talks with creditors over restructuring debts, a key measure demanded by the International Monetary Fund as part of a $17.5-billion lending program. The bill requires the signature of President Petro Poroshenko to take effect.

Ukrainian Finance Minister Natalia Yaresko said in a German newspaper interview that Kiev's foreign lenders should agree to a debt restructuring for the sake of German taxpayers. "The German taxpayers who are financially supporting us via national assistance loans and via the EU have a right for private creditors to share the costs by means of a debt restructuring," she said in an advance extract of an interview due to be published in Handelsblatt on Monday.

Ukraine’s $23bn debt restructuring negotiations appeared to reach boiling point late on Tuesday after the government issued a sharply worded statement that questioned the transparency, responsiveness and good faith of a creditors’ committee, the Financial Times reported.