The main government-held city in Ukraine's separatist east has been forced to shut off its hot water until at least mid-October because it does not have enough money to pay off utility debts.

The industrial port of Mariupol is home to 460,000 people and has been the repeated target of pro-Moscow insurgents based in the rebels' de facto capital Donetsk.

Mariupol, on the Sea of Azov, is the location of a major steel plant and has served as a home of the pro-Kiev administration of the war-torn Donetsk region since fighting broke out in 2014.

But its mayor Vadym Boychenko said on Wednesday that a debt of nearly $30 million (28 million euros) to the city's heating company left him with no choice but to switch off hot water until October 15 or possibly even the end of the year.

"We have been placed in circumstances under which we had no other choice but to switch off the hot water," local 0629 news site quoted Boychenko as saying.

Mariupol's problems are a prime example of the difficulty former Soviet Ukraine is having in modernising its economy and weaning people and even cities off budget-draining state subsidies for basics such as hot water and heating.

Crisis-torn Ukraine has gradually introduced market utility prices under the terms of $17.5 billion loan agreement struck with the International Monetary Fund in 2015.

The government raised heating tariffs by 75-90 percent in 2016.

But Ukraine's economy has only begun clawing its way out of a two-year recession that sliced 17 percent off economic growth.

Both city and federal budgets have trouble raising taxes and are not expected to feel the benefits of economic expansion for another year.

The economic problems have been exacerbated by heavy spending on a three-year military campaign against Russian-backed insurgents in the east that has claimed more than 10,000 lives.

The 0629 site estimated that Ukraine's total utility debts stand at some $730 million.

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