Ukraine's prime minister has insisted that a bailout deal reached with Russia will guarantee financial stability in the troubled country, according to the Associated Press.

Russian president Vladimir Putin has pledged to buy 15 billion dollars of Ukrainian government bonds and sharply cut the price of natural gas, to bail out his embattled Ukrainian counterpart after weeks of street protests.

The Ukrainian economy has been on the verge of default and president Victor Yanukovych has been lobbying Russia and the European Union for financial help.

Prime minister Mykola Azarov said that the Moscow agreements guarantee "people's confidence in a stable life".

The deal with Moscow, however, did little to appease the protesters calling on Yanukovych to turn away from Russia and renew ties with the EU. They immediately accused Yanukovych of selling the country out to the Kremlin and pressed demands for his removal.

Washington said the Kremlin agreements would not address concerns of the demonstrators in Kiev and German chancellor Angela Merkel dismissed what she described as a "bidding competition" over Ukraine.

Putin's move came as Ukraine said it desperately needs to get at least £10.15 billion in the coming months to avoid bankruptcy. The Fitch ratings agency has given Ukraine's bonds a B-minus rating, which puts them in "junk bond" territory.

Putin sought to calm protesters in Kiev by saying he and Yanukovych did not discuss the prospect of Ukraine joining a Moscow-dominated economic bloc they fear will pull their country closer into Russia's orbit.

Yanukovych has manoeuvered between Russia and the EU in an apparent search for the best possible deal. He has insisted Ukraine intends to sign the EU agreement but wants to negotiate better conditions.

Putin said the Russian state-controlled gas monopoly, Gazprom, will cut the price that Ukraine must pay for Russian gas deliveries by about one-third.

Ukraine serves as a key conduit for Russian natural gas exports to Europe, and fierce gas pricing disputes between the neighbors have repeatedly resulted in supply cuts to EU customers.