Ukraine's government has criticized a decision to take billions of euros of Russian wealth frozen in Europe and hand it to Western investors, warning that it weakened Europe's stand against Moscow.

The criticism follows a move last month by Belgium's Euroclear to take €3 billion ($3.4 billion) of Russian investor cash held at the clearing firm to pay Westerners who lost out when Moscow seized their money held in Russia.

Now Ukraine has warned that it sends a wrong signal and threatens to weaken Europe's hand when dealing with Russia, while it debates using the entire $300 billion of Russian wealth stranded in Europe to rebuild and defend the battered country.