Former Russian secret service chief accuses West of MH17 'cover-up' Retired secret service chief said Ukrainian forces shot down MH17 Lt. Gen. Nikolai Pushkarev also accused the West of knowing this Said West knows Ukraine shot MH17 and is 'using this to blame Russia' State subsidies for rebel areas have been frozen by Ukrainian government Western secret services were today accused of a cover-up over the shooting down of flight MH17 by a retired chief in Vladimir Putin's military intelligence agency. Retired Lt. Gen. Nikolai Pushkarev - formerly a senior official Russia's notorious secret service, GRU - implied that the aircraft was shot out of the sky by Ukrainian forces. The conspiratorial allegation came as Ukrainian prime minister announced that state subsidies for the eastern territories controlled by pro-Russian separatists will be frozen for an unspecified amount of time. Accusations: Retired Lt. Gen. Nikolai Pushkarev - formerly a senior official Russia's notorious secret service, GRU - implied that flight MH17 (pictured) was shot out of the sky by Ukrainian forces The official investigation into the MH17 disaster in July is still ongoing, but Western sources have pointed the finger at pro-Russian rebels downing the aircraft with a BUK missile. However, Pushkarev claims the investigation is being used to put blame on Russia. 'Western intelligence and the Americans are very well aware of all the details - who shot flight MH17 down, why and what for,' he alleged. They 'manipulate this information and this incident for their own benefit. This provocation was organised to lay blame on Russia and force it into sending troops to Ukraine, officially. But the Russian government did not succumb to this provocation. BAd times: Billions in state subsidies for the territories in eastern Ukraine controlled by pro-Russian separatists, including Donetsk, pictured, will be frozen for an unspecified amount of time He alleged that the US was trying to spark 'direct military conflict between Russia and Ukraine'. The conspiratorial allegation came as separatist officials in Donetsk claimed eye-witnesses saw a second mysterious aircraft in the sky as the Malaysian Airlines Boeing 777 was shot down in July. 'Onlookers said that immediately after the Boeing had exploded they saw a smaller, grey plane moving in the area of the Boeing's air route, which then disappeared in the clouds.' A source claimed that 'more than 20 onlookers were questioned' in regard to the 'sighting', but did not give more details. Both rebels and Russian officials have previously suggested a Ukrainian aircraft was in the sky, and some have claimed it shot down MH17, killing all 298 people on board. Prime Minister Arseniy Yatsenyuk told a government meeting that $2.6 billion in state support will be held back from rebel-held areas The source said that testimony on the sightings would be handed to the international Dutch-led probe into the Boeing crash. This follows the announcement by the Ukrainian government that billions in state support for the rebel controlled areas will be held back until further notice. Aging industrial operations in Ukraine's economically depressed but coal-rich east have for many years relied heavily on state subsidies. Prime Minister Arseniy Yatsenyuk told a government meeting that $2.6 billion in state support will be held back from rebel-held areas in the Donetsk and Luhansk regions. He did not say what time period that subsidy figure represented. Yatsenyuk said the payment of pensions and government benefits to residents in conflict-stricken parts of the east will resume after separatist forces have surrendered there. The government has not been paying pensions in those areas for several months, but has said back payments will be paid to recipients when the rebels move out. Ukraine's government has blamed Russia for fomenting the last six months of fighting between government forces and separatist fighters in the east. Moscow denies that it supplies rebel fighters with either manpower or military equipment. Yatsenyuk said suspending subsidies to the rebel-occupied areas would cut off a vital source of funding for rebel forces. 'The money we pay into those territories today does not get to the people but is stolen by Russian bandits, and this would be nothing but directly supporting Russian terrorism,' he said. The regions are among the most economically depressed in Ukraine and living standards have slipped further since hostilities erupted. Yatsenyuk said gas and electricity from government-held regions would continue to be supplied to rebel zones. 'Those are our citizens and the government will not allow these people to freeze, as this would lead to a humanitarian catastrophe,' he said. A cease-fire was agreed upon in early September but fighting has still continued. More than 4,000 people have been killed in the region since the conflict began in April, according to UN estimates.