UKRAINE'S prime minister has offered to boost local powers in the regions in a bid to undercut pro-Russia separatists occupying official buildings in the country's east.

A group still held the main regional offices in Donetsk, while in Luhansk armed rebels were refusing an offer to avoid prosecution if they laid down their weapons and left the regional offices of the state security service.

The pro-Europe leadership in Kiev says the separatists are acting out a Kremlin plan to dismember Ukraine and follow the scenario Russia used to annex Crimea.

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The protesters in Luhansk, who, like Moscow, are critical of the so-called Euromaidan revolution that ousted the Kremlin-backed Viktor Yanukovich as president, have taken guns from an armoury in the building and are pressing for a referendum on the region's future.

Those in Donetsk appear to be sticking to demands for a form of self-rule following talks with local officials and Ukraine's richest man, multi-billionaire Rinat Akhmetov.

Touring Donetsk and the eastern city of Dnipropetrovsk, Prime Minister Arseny Yatseniuk said yesterday that under a blueprint for a new constitution "a significant number" of powers would devolve from the Kiev government to Ukraine's regions. These would allow regions to plough back a portion of state taxes into the local economy and infrastructure.

The "decentralisation" proposals appeared in part designed to meet separatists' demands for self-rule, but differ from Russian calls for Ukraine to be "federalised".

Kiev sees federalisation, as proposed by Moscow, as part of a deeper Kremlin plan which would be manipulated by Russia in vulnerable Russian-speaking areas such as Donetsk and Luhansk to bring about the break-up of Ukraine.

The proposals came as Mr Yatseniuk made new appeals to separatists to lay down their arms. The authorities have already let one ultimatum pass without using force to end the separatists' occupations.

But Mr Yatseniuk said: "There is a limit for everybody. Everything is being done so that those who have seized buildings come out of the buildings before force is used. And today we have that ability."

First deputy prime minister Vitaly Yarema, who was accompanying MrYatseniuk, said: "We are leading active negotiations with these terrorists, separatists, as we call them and we hope to solve this issue by peaceful means."

In Luhansk, the separatists who seized the state security building and call themselves the Southeastern Army showed little signs of backing down.

"We demand that the central authorities pass a law within three days on a local referendum and formalise the status of united forces of the Southeastern army as a military unit," said Valery Bulatov, one of the leaders.

Alexei Koryakin, wearing a green paramilitary jacket and speaking from inside the occupied building, said the group was also eyeing the declaration of a Luhansk Republic - a move similar to that taken by Donetsk earlier in the week.

Russia's chief prosecutor meanwhile was quoted as saying that Moscow regarded Mr Yanukovich, who has been in Russia since fleeing Ukraine on February 22, as the "fully fledged, legitimate president" and that he would not be extradited to face mass murder charges over the killings of more than 100 people in Kiev by police during the unrest.