West sceptical of Putin’s u-turn on Ukraine

She said Putin’s call for pro-Russian rebels in Donetsk, eastern Ukraine, to postpone an 11 May referendum on independence and his endorsement of Ukraine’s 25 May presidential elections are “a helpful step”.

But she added the 11 May referendum is “illegal” and should be cancelled. She also said: “There is far more that President Putin and the Russians can do to de-escalate the situation and to ensure safe elections … They can refrain from any interference with election preparations. They can use their influence on the armed militants who are taking steps to interfere with that preparation process.”

She noted the US and the EU are continuing preparatory work on economic sanctions against Russia if the situation deteriorates.

Meanwhile, the White House the same day announced it is cancelling preferential tariffs on Russian imports under the so-called Generalised System of Preferences because “Russia is sufficiently advanced economically that it no longer warrants preferential treatment”.

Putin made his announcement after a meeting with Swiss President Didier Burkhalter in Moscow.

He said: “We have withdrawn our forces and they are now not on the Ukrainian border, but are carrying out their regular exercises at test grounds. This can be easily verified using modern intelligence techniques, including from space, where everything can be seen.”

He “appealed” to separatists in Donetsk and Luhansk in eastern Ukraine “to hold off the referendum scheduled for May 11” for the sake of peace talks and called the 25 May presidential vote “a step in the right direction.”

He added that authorities in Kiev should hold talks with separatists in a “direct, fully-fledged and equal dialogue” on creating a federal Ukraine.

His endorsement of the 25 May election represents a u-turn on previous statements that the vote is invalid because parts of the country are in turmoil and because Ukraine's ousted leader, Viktor Yanukovych, is still its legitimate president. But his call for rebels to be treated as equals raises the prospect of a divided Ukraine which cannot progress on EU integration.

For their part, Donetsk and Luhansk militants said they will put the Kremlin's appeal to a local vote. "We respect Putin's stance … He is a balanced politician. Therefore we will submit his proposal to the people's council,” Denis Pushilin, a pro-Russian leader in Donetsk, who is on an EU blacklist, said.

But Nato secretary general Anders Fogh Rasmussen also gave Russia little credit in remarks in Warsaw on Wednesday.

He said that to “compare what happened in Kiev in February [the overthrow of Yanukovych] with what is happening today in eastern Ukraine is totally misleading and, coming from Russia, hypocritical.”

He added: “Public protests against any government are a part of democracy, but the violent pro-Russian separatists armed with heavy weapons who occupy public buildings and take hostages are not part of democracy, and if these groups swear allegiance to Russia, whose troops are massed on Ukraine’s border, that is not democracy.”

He pledged to hold more drills and station more military assets in former Soviet and Communist Nato member states to reassure them they are safe from Russia.

“Nato’s greatest responsibility is to protect and defend our populations and territory, and let me be clear: Nato stands by Poland,” he said.

Back in Brussels, top EU officials Herman Van Rompuy and Jose Manuel Barroso threatened further sanctions if Putin continues to destabilise Ukraine.

Speaking shortly before Putin’s announcement, Van Rompuy noted that Japan, whose PM, Shinzo Abe, was in the EU capital for trade talks, has also blacklisted 23 Russians and is ready to go further if need be.

Abe noted that Japan is sending 10 observers to the 25 May elections and said: "We call on Russia to follow the diplomatic path”.