Brussels -- Gas shortages spread across Europe reaching France and Italy on Tuesday as cuts in Russian supplies through Ukrainian pipelines escalated an increasingly bitter crisis in the depths of winter.

With 17 European countries reporting sharp falls or a complete halt in Russian gas shipments, the European Union said "the situation is completely unacceptable" and demanded the flow be restored.

In the first sign of compromise, however, gas officials in Moscow and Kiev signalled that they were ready for further talks to resolve the problems. But both sides continued to trade blame publicly for the disruption.

"The Czech EU Presidency and the European Commission demand that gas supplies be restored immediately to the EU and that the two parties resume negotiations at once," they said in a statement.

One after another, European countries announced cuts in their supplies of Russian gas, with Balkan countries the hardest hit but EU heavyweights France, Germany and Italy also suffering reductions.

Russia is the world's largest natural gas producer and provides around one-quarter of the gas used in the European Union, or about 40 percent of the gas the bloc imports.

Russia cut gas supplies to Ukraine on January 1 over a payment dispute. It then accused Ukraine of "stealing" Russian gas meant for customers in Europe.

On Monday, Russian Prime Minister Vladimir Putin ordered an immediate reduction of gas shipped to Europe via Ukraine to compensate for volumes Gazprom said had been illegally siphoned off by Kiev.

Leaders in both Russia and Ukraine had pledged in recent weeks that supplies to Europe would not be disrupted by their dispute and they are now scrambling to paint each other as an unreliable energy partner for the EU.

A growing number of countries reported sudden and sharp supply shortfalls, with nations in southern and eastern Europe who depend most heavily on Russia the hardest hit.