George Soros, the billionaire investor, today warned that Europe is becoming dependent on Russian energy at a time when the Kremlin is using the country's huge oil and gas reserves to further its political aims.

Mr Soros, best known for betting against the pound during the 1992 ERM crisis and "breaking" the Bank of England, said: "It’s a wake-up call for Europe because Russia is using the gas factor to bring Georgia and Ukraine to heel ... Russia is in the driving seat."

His remarks were reported by Reuters at the World Economic Forum in Davos. They followed tensions after a pipeline blast cut of Russia’s gas supply to Georgia. The disruption was blamed on terrorists by Russia, while Georgian officials accused Russia of sabotage.

Last month Russia threatened to cut off gas supplies to Ukraine unless the country agreed to a fourfold increase in the price it pays for gas.

A compromise deal was eventually hammered out. But it is not only Ukraine that could potentially face such threats. The European Union imports about half of its gas from Russia.

A year ago, the state oil company, Rosneft, swallowed up most of Russia’s biggest private oil company, Yukos. Then in October Gazprom bought the fifth-largest oil firm, Sibneft. The net result is that the Kremlin now controls 30 per cent of Russia’s oil reserves, and all of its gas supplies and pipelines.

Claude Mandil, the executive director of the International Energy Agency (IEA) yesterday urged Russia to reform its energy markets and the monoploy of Gazprom, the state-run gas producer.

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