By Richard Balmforth
KIEV (Reuters) - Ukraine's parliament failed to break a deadlock on Tuesday over freeing jailed opposition leader Yulia Tymoshenko, with deputies openly recognizing that a landmark trade deal with the European Union may not be signed as scheduled next week.
With the EU demanding Tymoshenko's release as a condition, deputies from the ruling party and opposition accused each other of undermining prospects for the trade and cooperation agreement, which would mark a historic westwards shift by Ukraine away from Russia.
Time is running out for the planned November 29 signing at a summit in the Lithuanian capital Vilnius, and the parliamentary session was called to try to pass a law freeing Tymoshenko for medical treatment in Germany in line with calls from the EU.
However, emotions ran high at the two-hour session and debate on the law was delayed until Thursday.
The fate of former prime minister Tymoshenko - a fierce opponent of President Viktor Yanukovich who is serving a seven-year sentence after a trial that Western governments say was political - is the main sticking point for the Vilnius summit.
Yanukovich has refused to pardon Tymoshenko, internationally renowned as the braided-haired co-leader of Ukraine's Orange Revolution protests against electoral fraud nine years ago and whom he only narrowly beat for the presidency in February 2010.
He has, however, said he will sign into law any proposal by parliament to allow her to go to Germany for hospital treatment for a spinal condition.
But parliament remained deadlocked with pro-Yanukovich deputies and opposition parties unable even to agree on a draft law that could go forward to the session for discussion. Speaker Volodymyr Rybak announced that discussion of remaining laws relating to Ukraine's "Euro-integration" course, including one on Tymoshenko's release, would be put back to November 21.
Yanukovich himself has up to now stuck with his policy of Euro-integration despite diplomatic pressure from Russia, on which Ukraine relies for gas supplies, and threats of retaliatory trade action by the Kremlin.
But a new harsher line is being taken by his supporters in parliament who are expressing annoyance and suspicion of the EU at the bloc's insistence on Tymoshenko's release.
This has led to speculation that Yanukovich, who met Stefan Fuele, the EU's point man on Ukraine, on Tuesday might be seeking a delay in the signing.
"A postponement in the signature is a possible option in the development of events. This would allow for a reconciliation with Moscow ... it would neutralize the risk of a trade war with Russia. Euro-integration would not change, it would be just put off," said analyst Volodymyr Fesenko of Penta think tank.
Freeing Tymoshenko could allow her to stage a political comeback and challenge Yanukovich in the next presidential election due in 2015.
Former Economy Minister Arseny Yatsenyuk, an opposition leader, accused Yanukovich of endangering Ukraine's future in Europe by his obsession with Tymoshenko.
"The fear, and more particularly the personal fear that Viktor Yanukovich has of one person, Yulia Tymoshenko, can darken our European prospects," he said.
He called on deputies from Yanukovich's Regions Party to return to the chamber on Thursday and rush through the necessary legislation. "Then Vilnius will be a success and Ukraine will be a European country," he declared.
World boxing champion-turned-politician Vitaly Klitschko, another opposition leader and possible challenger for the presidency in 2015, called on Yanukovich to state clearly whether he wanted a signing or not.
"The impression is growing that those in power are trying by every means to dump 'Euro-integration' and blame it for all the problems which an unprofessional government have created," he said.
Anna German, a Regions Party deputy, defended Yanukovich, saying he had the political will to bring success at Vilnius "under the best conditions for Ukraine". She accused opposition leaders of urging EU officials not to sign at Vilnius in order to further their own political ambitions.
RUSSIA ACCUSES EU
Russian Foreign Minister Sergei Lavrov accused the EU of putting "unforgivable pressure" on Ukraine in order to secure the trade deal and compared this with what he described as Moscow's "honorable and collegial position".
The Kremlin has urged Ukraine to join instead a Moscow-led customs union - something Yanukovich has turned down - and has hinted at retaliatory trade action if Kiev goes through with the EU deal.
EU summit host Lithuania warned Ukraine on Monday that the Tymoshenko question had to be resolved and other reforms on elections and the public prosecutor's office enacted for there to be success at Vilnius. "If this is not done, it will not be possible to sign the agreement," President Dalia Grybauskaite said.
German Chancellor Angela Merkel, speaking also on Monday, promised to counteract any retaliatory measures by Russia by providing "concrete opportunities and real solidarity" to Ukraine.
But Merkel also said Germany expected "credible steps" by Ukraine to fulfil the criteria for an association agreement.
(Additional reporting by Natalya Zinets and Pavel Polityuk; editing by David Stamp)