In a statement posted on the defense ministry's website, Defense Minister Anatoly Grytsenko said Ukraine had an excess 16.5 tons of the fuel, known as "melange", in storage at sites around the country and said Kiev would soon take bids for the contract to reprocess it.

"It is dangerous rocket fuel and it should be recycled," Grytsenko said.

The operation will cost around four million dollars and Ukraine hopes to receive financial aid to carry it out from the Organization for Security and Cooperation in Europe (OSCE) and the North Atlantic Treaty Organization (NATO), the daily Economicheskie Izvestia reported separately.

Melange is a complex chemical compound whose components evaporate easily and are highly toxic. It was used by the Soviet Union as fuel for large rockets and guided missiles.

Large quantities of the substance remain in storage at sites scattered throughout the former Soviet republics.