Ukraine's Yulia Tymoshenko yesterday defiantly refused to concede defeat to rival Viktor Yanukovich in a presidential election, throwing Ukraine into turmoil that threatened chances of a swift return to stability.

Ending a bizarre three-day silence, the fiery Prime Minister - chairing a Cabinet meeting in her trademark peasant braid - attacked Mr Yanukovich and his Regions Party for using social spending promises as "pre-election PR".

First deputy and close aide Oleksander Turchynov told reporters Mr Tymoshenko had no intention of bowing to a call by opposition leader Mr Yanukovich for her to step down.

"The government does not plan to resign voluntarily," Mr Turchynov told reporters. "I don't see any basis for this (resignation)," he said.

Western congratulations for Mr Yanukovich began trickling in, but Ms Tymoshenko's defiant performance appeared to herald a protracted stand-off between the rivals for power who fought a bitter campaign of smears and insults leading up to the February 7 run-off which Mr Yanukovich won by 3.48 percentage points.

Supporters of Mr Yanukovich, a 59-year-old ex-mechanic who wants to improve ties with Moscow, can now try to force her out through a parliamentary vote of no-confidence.

But Ms Tymoshenko, co-architect of the pro-Western Orange Revolution of 2004, would still stay on as acting prime minister until a new parliamentary coalition was formed - itself a lengthy process of horse-trading over government posts.

Ms Tymoshenko's team has alleged "cynical fraud" by the Yanukovich camp, and is forcing a vote recount in some regions.

But monitors hailed the election as fair, and French President Nicolas Sarkozy became the first EU leader to call Mr Yanukovich's win a "victory for Ukrainian democracy".

"...the Ukrainian people has expressed its choice in the course of free, pluralist and democratic elections," he said in a statement.

The stand-off in the ex-Soviet republic of 46 million people threatens further instability, deterring investors and dimming prospects for a recovery for the sickly economy.

Parliament deputy speaker Mykola Tomenko, a member of Ms Tymoshenko's bloc, challenged Mr Yanukovich to find the votes in Parliament to dismiss the government.

"As soon as a new... coalition is formed, I'm sure the Tymoshenko bloc will the same day declare itself a Ukrainian, European opposition force and will continue to defend those values in Parliament," he said.

Mr Yanukovich, who would normally expect to be sworn in as president by March 17, will have to call snap elections if he could not form a new coalition - but his Regions Party would likely then lose ground leaving him in an even weaker position. "The main result of these elections is that Yanukovich came first, but did not win. Ms Tymoshenko, on the other hand, lost but was not defeated," Ukrainska Pravda commentator Vadym Karasov wrote.