State-owned Gazprom cut supplies by a further 25% on Tuesday, following a 25% cut a day earlier - thereby cutting supplies by half.
Prior to the news, the EU called for an emergency internal meeting amid fears the row could hit European supplies.
Much of the gas Russia sells to Europe passes through pipelines in Ukraine.
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The EU said the meeting would ensure "a fully coordinated EU response to the situation," adding "we look to both parties to ensure that gas supplies to the EU remain unaffected".
The news of the second cut was made after a 1700GMT deadline on Tuesday.
"If the Ukrainian side does not return to the negotiating table, I do not exclude a further reduction in supplies," Sergei Kupriyanov, a Gazprom spokesman, said on state television.
The dispute started after Russia said Ukraine had not paid its debts for previous deliveries, which Gazprom says totals $1.5bn (£770m).
But Ukraine maintains the payments have already been made.
Escalating crisis
Gazprom said it reduced supplies to Ukraine by 25% on Monday after talks broke down last week.
Monday's cut effectively ended supplies of gas directly from Russia, which make up a quarter of Ukraine's imports. The rest of Ukraine's imports comes from other states but travels through Russian pipelines.
Naftogaz, Ukraine's state gas company, earlier said it reserved the right to take "appropriate" action - and disrupt supplies to Europe that transit Ukraine - if Gazprom carried out the threatened additional cut.
"In the event that Gazprom continues blatantly to violate technical agreements between the two countries by reducing volumes of Central Asian gas to Ukraine, Naftogaz reserves the right to introduce appropriate, asymmetrical actions to defend the interests of Ukrainian consumers," the company said.
European fears
Gazprom spokesman Sergei Kupriyanov reassured European gas users on Tuesday that shipments of Russian gas would continue.
"Export deliveries via Ukrainian territory are carried out in full volume," he said.
European Commission spokesman Michele Cercone said: "They [Gazprom] reassured us that gas supplies to the European Union will not be affected.
A National Grid spokesperson said the UK did not rely on pipelines crossing Ukraine for its gas. "The UK doesn't get any of its gas direct from Russia," he said.
Kiev tension
A previous row between the two sides saw Russia cut gas to Ukraine in 2006. It also hit exports to Western Europe and affected diplomatic relations between Brussels and Moscow.
The BBC's Europe business correspondent Dominic Laurie says since that last crisis, a lot of work has been done to improve the relationship.
"Top officials meet often, and there's now an early warning system with Gazprom that alerts Brussels about dips in supplies at the Russian end," he said.
"The trouble is, the problems aren't there - but further west - in Ukraine. Kiev's energy relationship with Russia is the one that matters, and that just seems to be getting worse."
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