By Thomas Grove and Pavel Polityuk
KIEV (Reuters) - Ukrainian President Viktor Yanukovich said the European Union should stop meddling in the fate of his rival, former Prime Minister Yulia Tymoshenko, and that her imprisonment should not hinder Kiev's integration with Europe.
Pouring scorn on the woman who helped engineer the 2004-5 Orange Revolution that thwarted his first bid at the presidency, Yanukovich said she was part of a ring of criminals and that her fate should lie in the hands of Ukrainian judges.
Tymoshenko's jailing symbolised what Brussels has called Kiev's use of selective justice. Yanukovich's comments effectively dismissed the EU's intense diplomatic efforts, in which he has participated, to secure her release.
Yanukovich has promised to attend an EU summit this week despite his sudden decision to walk away from a landmark deal with the bloc.
His trip to the summit in Vilnius may be an attempt to soothe domestic outrage that has sparked pro-EU demonstrations. Or he may be signaling a willingness to focus on Ukraine's economic ties with the EU without making political commitments.
On the eve of the summit in the Lithuanian capital, thousands of people rallied on Kiev's main square, many of them students, calling on Yanukovich to sign the free trade pact with the EU.
His comments over Tymoshenko are sure to cause tension with EU leaders in Vilnius - most likely at a dinner on Thursday, particularly with German Chancellor Angela Merkel.
"The issue of Yulia Tymoshenko should not be a hindrance to Ukraine's European integration," Yanukovich said in an interview broadcast on Wednesday, but filmed late on Tuesday.
"The (Ukrainian) courts, which she has been evading and thereby obstructing justice, should give the answer. What does the European Union have to do with this? Is the European Union a court?" he asked.
Germany was to have accepted Tymoshenko for treatment for chronic back trouble under a compromise which was being put together by a two-man EU humanitarian mission. This has died along with the planned signing of Ukraine's deal with the EU.
Clinching the EU free trade pact, which Polish President Bronislaw Komorowski said was thwarted by Russian 'blackmail and pressure', would have marked a definitive turn towards the West for Kiev and away from its former Soviet master Moscow.
The European Union has accused Russia, which wants Kiev to become a member of its own post-Soviet Customs Union, of pressuring Kiev into walking away from the EU deal.
Speaking at a news conference, Merkel said Germany, one of Russia's biggest trading partners, could play a role in helping Moscow abandon what she called Cold War thinking.
"We have a structural problem, which is that moves towards Europe are viewed for now in Russia as a rejection of Russia, and we must overcome this 'either/or' mentality," she said.
"We must get over the last relics of the Cold War."
A Russian deputy prime minister, Dmitry Rogozin, kept up pressure on Ukraine, saying its integration with the EU would endanger joint defense projects because, as he said, the agreement of association would bring Kiev closer to NATO.
Yanukovich had held his fire over Tymoshenko during Ukraine's negotiations with the EU, but on Wednesday he said she and her "criminal activities" were to blame in part for the state of the country's troubled economy.
Tymoshenko brokered negotiations with Russia that force Ukraine to pay around $400 a month per 1,000 cubic meter of Russian gas, above the $385 average Western Europe pays.
"Today because of Tymoshenko, Ukraine is paying off debts to Russia," he said. "Friends of Tymoshenko are sitting in various prisons in various countries around the world," he said, in a reference to former Prime Minister Pavlo Lazarenko who was accused of money laundering in the United States.
He served his sentence but is still in detention in the United States over immigration issues.
Tymoshenko, whose jailing on abuse of power charges sparked criticism at home and abroad, asked Yanukovich to conclude the free trade deal with the EU, whether she is released or not.
"If Yanukovich takes a positive decision, I plead with you to sign the agreement on Friday without any hesitation or conditions, including those related to my release," Interfax reported her as saying. She is now on a hunger strike to protest against Kiev's decision to renew economic ties with Russia.
Ukraine, which must find more than $17 billion next year to meet Russian gas bills and debt repayments, including $3.7 billion to the International Monetary Fund, has said Europe's financial aid offer to Kiev was 'humiliating'.
In the Polish daily Gazeta Wyborcza, Komorowski, the Polish president, said Russia had exploited Ukraine's short-term economic weaknesses to keep it within its orbit, adding to tough statements directed at the Kremlin from various EU officials.
"The problem is the policy of pressure and blackmail employed towards Ukraine by its eastern neighbor," he said.
Russia has extended numerous loans to Ukraine over the years and tensions over its unpaid gas debts to Moscow have eased since Kiev announced it was abandoning the EU agreement.
Thousands of people kept up protests in Kiev's Independence Square, where Tymoshenko had delivered her speeches during the Orange Revolution, to express their anger at the decision of Yanukovich's government to suspend the signing of the EU deal.
"We know that Russia holds nothing for us. We cannot allow Putin's Russia to be our future. We will continue to come out on the streets to let our leadership know our place is in Russia," said Igor Panin, 31, an entrepreneur who travelled from his home city of Poltava to demonstrate in Kiev.
(Additional reporting by Alexandra Hudson in Berlin, Writing by Thomas Grove, editing by Jon Boyle and Alistair Lyon)