Vladimir Putin has called for immediate talks on granting "statehood" to southeast Ukraine as pro-Russian forces intensify their assault on Ukrainian cities.
Negotiations for a ceasefire between Ukraine and its separatists are continuing in Belarus, with Russia's foreign minister Sergei Lavrov urging Ukraine to withdraw troops from its own territories.
The Times says Putin's call will "raise the spectre of a new Russian puppet state inside Europe". It says Putin has started referring to the Donbass region as "Novorossiya" in reference to its past as a province of Russia under the Tsars.
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Days ago, Putin compared the Ukrainian government to Nazis and warned the West: "Don't mess with us."
Speaking yesterday on state TV, Putin said talks should focus "not just on technical issues but on the political organisation of society and statehood in southeastern Ukraine". He said Moscow could not stand by while people were shot "almost at point blank".
The president's latest intervention comes after pro-Russian rebels last week achieved a string of successes. On Saturday they were accused of killing hundreds of Ukrainian soldiers and taking dozens more prisoner. In the first naval attack of what seems to be a nascent civil war, a Ukrainian vessel in the Azov sea was fired on yesterday.
While Russia denies supporting the rebels, Nato insists that the latest gains are on the back of "more and more overt" military assistance, including the deployment of more than 1,000 troops with heavy weaponry and armoured vehicles. Russia is thought by many observers to have supplied the rockets which downed MH17.
BBC news says Putin's foreign minister, Sergei Lavrov, has demanded that Ukraine pull back troops from its own territory in order to negotiate an "immediate ceasefire". He said troops "must leave positions from which they can harm the civilian population".
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