In an emergency session on Tuesday, Ukrainian lawmakers voted to give the government the right to delay repaying international creditors if necessary.

The war-torn country is trying to reach an agreement by next month that would save it $15.3 billion (13.7 billion euros) over the coming four years and avoid a potentially devastating default.

A successful debt restructuring deal would guarantee the release of the next part of a $17.5-billion International Monetary Fund (IMF) loan that forms the core of a global $40-billion rescue for the ex-Soviet state.

The new law covers the $3.0-billion (2.7-billion-euro) loan that Moscow issued in December 2013 to the since-ousted Kremlin-backed president Viktor Yanukovych in return for his decision to back out of an economic and political partnership pact with the European Union.

According to Russian Prime Minister Dmitry Medvedev, the law “means that (Ukraine) is defaulting on its debt payments and that it is invoking force majeure”.

Ordered on Wednesday by Russian President Vladimir Putin to “bring under control” Ukraine’s debt payments, Medvedev said a significant portion of the loans had been contracted out by banks whose main shareholder is the Russian state.

“The Russian state and our banks should respond adequately and use all the possible means of self-defence, including legal action,” the prime minister warned.

Putin himself appeared to play down Medvedev’s warning.

“We have long had the right to demand that the sum be returned in advance,” Putin said, according to RIA Novosti news agency.

“But at the request of our partners in Ukraine and the IMF, we are not exercising our right in order to not aggravate the situation,” he said.

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