By Tom Balmforth
KYIV (Reuters) -Power at a critical nuclear plant in Ukraine was all but cut off on Monday for the second time in two weeks as Kyiv accused Moscow of pushing the war to the brink of nuclear catastrophe, one day before the U.N. nuclear watchdog was due to issue an assessment of the Zaporizhzhia power station. .
Ukraine and Russia have accused each other of risking catastrophe by shelling near the plant, which officials said disrupted power lines and taken the sole remaining reactor at Europe's largest nuclear plant offline.
The International Atomic Energy Agency, citing information supplied from Ukraine, said the plant's backup power line had been cut to extinguish a fire but that the line itself was not damaged and would be reconnected.
The plant has enough electricity to operate safely and will be reconnected to the grid once the backup power is restored, the watchdog agency said in a statement before releasing its full findings in a fuller report on Tuesday.
Ukrainian President Volodymyr Zelenskiy on Monday warned of a near "radiation catastrophe" and said the shelling showed Russia "does not care what the IAEA will say."
"Again - already for the second time - because of Russian provocation, the Zaporizhzhia station was placed one step away from a radiation catastrophe," he said in his nightly video message.
The nuclear concerns add to the ongoing energy fight between Moscow and the West since Russian troops invaded Ukraine in late February as the larger military conflict continues.
European markets on Monday went into free-fall as Russia kept its main gas pipeline to Germany shut. Meanwhile, Kyiv made its boldest claim yet of success on the battlefield in its week-old counter-offensive against Russian forces in the south.
The six-reactor Zaporizhzhia plant in southern Ukraine has become a focal point of the six-month conflict after Moscow took control of the facility in March, even as Ukrainian engineers continue to operate it, raising the spectre of a nuclear accident.
Ukraine's state nuclear company Energoatom said the plant's last working reactor block was disconnected from Ukraine's grid after Russian shelling disrupted power lines.
Vladimir Rogov, a Russian-installed official in Zaporizhzhia region, said Ukrainian shelling had damaged a containment vessel next to the second reactor but its operation was unaffected.
Following days of silence about their new offensive, Ukrainian officials posted an image online of three soldiers raising a flag over a town in Kherson province, a southern region occupied by Russia since the war's early days.
The image of the flag being fixed to a pole on a rooftop, purportedly in Vysokopyllya in the north of Kherson, was released as Zelenskiy on Sunday announced Ukrainian forces had captured two towns in the south and one in the east without identifying them.
COUNTER-ATTACK
After months of enduring punishing Russian artillery assaults in the east, Ukraine has at last begun its long-awaited counter-attack, its biggest since it repelled Russian forces from the outskirts of Kyiv in March.
Ukraine had kept most details of its new campaign under wraps, banning journalists from the frontline and offering little public commentary in order to preserve tactical surprise.
Russia has said it pushed back assaults in Kherson, but in a rare acknowledgment of the Ukrainian counter-offensive, TASS news agency quoted a Moscow-installed official in the region as saying plans for a referendum on joining Russia had been put on hold due to the security situation.
In a Monday evening update, the Ukrainian general staff said its forces had driven back Russian forces in an unspecified area near Kramatorsk - a key town in eastern Donetsk region - while Russian forces had shelled about a dozen towns in the south.
Still, Zelenskiy has warned European countries that they could face a cold winter.
On Monday evening, a missile strike by Russian forces destroyed an oil depot in Kryvorizsky district in Dnipropetrovsk region, emergency authorities in the area said on Facebook (NASDAQ:META) following earlier nearby Russian missile strikes.
BLEAK WINTER
Moscow blames disruption to equipment repairs and maintenance caused by Western sanctions for its halt to the flow of gas through Nord Stream 1, its main pipeline to Germany. Russia was due to reopen the pipeline on Saturday but is now shut indefinitely.
"Problems with gas supply arose because of the sanctions imposed on our country by Western states, including Germany and Britain," Kremlin spokesman Dmitry Peskov said on Monday.
Europe and the United States say Russia is using energy as a weapon but add they are collaborating to ensure supplies.
European countries have also rolled out billions of euros in aid that last week helped drive European gas prices back down sharply from record highs.
But the weekend news about Nord Stream's extended shutdown sent prices soaring once again on Monday, with the main European benchmark up by more than 35%, bringing fears of a bleak winter for consumers and businesses across the continent.
Germany's DAX share index was down well over 2%, the Euro sank below 99 U.S. cents for the first time in decades, and the pound was not far off mid-1980s lows against the dollar as Liz Truss was announced as Britain's next prime minister.
Russia's Peskov vowed retaliation for the latest Western move aimed at capping the price of Russian oil exports from December designed to reduce Moscow's main source of income.
In Russia, which has effectively banned independent media since President Vladimir Putin launched his "special military operation" Feb. 24, a judge on Monday revoked the license of liberal newspaper Novaya Gazeta, one of the last unofficial voices.
The ruling was "a political hit job, without the slightest legal basis", said its editor, Dmitry Muratov, who won last year's Nobel Peace Prize for the paper's fight for free speech.
A Russian court also sentenced a former journalist to 22 years in prison for treason after prosecutors said he disclosed state secrets. His supporters say the case is retribution for him exposing details of Russia's international arms deals.