UPDATE 2-Ukraine's Yanukovich backs wage rises opposed by IMF

*Yanukovich says backs wage rises despite IMF conditions

*Says if elected president, will not work with PM Tymoshenko

*The two face each other in Feb. 7 runoff vote for president

(Adds fresh quotes, background)

By Richard Balmforth and Pavel Polityuk

KIEV, Jan 27 (Reuters) - Ukrainian presidential frontrunner Viktor Yanukovich signalled on Wednesday he would try to review a $16.4 billion bailout programme with the IMF if elected president, saying he backed wage rises that the fund opposed.

He also raised the prospect of a snap parliamentary election for a new government to replace that of Yulia Tymoshenko -- also likely to delay a resumption of lending by the International Monetary Fund to the ex-Soviet state.

Opposition leader Yanukovich faces Tymoshenko in a Feb. 7 runoff vote for the presidency of a country that is in the throes of a deep economic crisis, with falling steel exports, crippled state finances and a weak national currency.

Speaking to a group of foreign journalists, he said he would stand by a law passed late last year that raised minimum wage and pensions, breaching promises to control budget spending.

The IMF suspended its programme as a result.

"Social standards must reflect the real situation of life in the country. The authorities must protect the vulnerable in the population. These are first of all pensioners, the disabled, orphans and large families," he said.

"This is what we demanded and approved accordingly by law, which must be implemented," Yanukovich declared.

The IMF has said the wages bill could cost Ukraine as much as 7 percent of its gross domestic product. But by insisting that the wage increases must go through, Yanukovich is indicating the programme must be renegotiated with the fund.

"We will define a programme with the IMF that will suit the IMF and Ukraine and we will create relations that are transparent and comprehensible to the Ukrainian society and which will be supported by the Ukrainian parliament," he said.

The IMF disbursed $10.5 billion of the bail-out programme by last November before deciding against giving a further $3.8 billion. Its programme, while supporting Ukraine's finances and central bank reserves, was conditional on budget austerity.

Yanukovich ruled out any future cooperation with Tymoshenko, whose government has negotiated with the Fund.

Describing her record in office as "ineffective", he said he would seek a new ruling coalition to decide on a future prime minister. If that did not emerge, he would seek snap elections.

Many analysts assume that the Fund is unlikely to resume lending to Ukraine until the post-election fallout has settled and a permanent government is in place.

These analysts at the same time say Ukraine will find it tough to survive long without further IMF help.

POLITICAL COMEBACK

If Yanukovich wins the presidency, it will be a remarkable comeback from disgrace in 2004 when an election, rigged in his favour, triggered mass protests called the "Orange Revolution".

Tagged a pro-Moscow stooge when the Kremlin rushed to congratulate him prematurely, he then saw his victory overturned by a court and he went on to lose a third round of voting to the pro-Western President Viktor Yushchenko.

The 59-year-old ex-mechanic from eastern Ukraine has been on the receiving end of some fierce attacks by Tymoshenko.

The sharp-tongued 49-year-old Tymoshenko has ridiculed his educational background and labelled him a "puppet" manipulated by his oligarch backers.

On Wednesday, he took the opportunity of hitting back.

"Her lack of method and her ineffectiveness and authoritarianism in directing the country is a policy ... that has no prospects," he said.

Working with her in the future would be impossible, he said. "Time has shown that she can not build partner relations with anybody," he added.

He also said that a 10-year gas deal with Russia signed by Tymoshenko and Russian Prime Minister Vladimir Putin in January 2009 would have to be looked at again. "...we will strive so that the price of gas for Ukraine is a just one," he said.

The deal with Russia put an end to a prices row which led to Russia cutting off supplies for nearly three weeks, affecting millions of households in the European Union which receives much of its gas in transit through Ukraine.

Yanukovich offered to Russia and the European Union the creation of a consortium which would operate Ukraine's pipeline system -- a move which the EU believes would safeguard supplies of Russian natural gas to Europe. [ID:nLDE60Q2IU] (Writing by Richard Balmforth and Sabina Zawadzki; Editing by Charles Dick)