KIEV, Aug 16 (Reuters) - Defence lawyers for Ukrainian ex-Prime Minister Yulia Tymoshenko urged an appeals court on Thursday to quash her conviction for abuse of office, but prosecutors insisted she had damaged the state by brokering a disadvantageous gas deal with Russia.
During a day-long hearing, the opposition leader's defence argued that negotiating the gas agreement with Russia in 2009 as prime minister constituted a political act which did not represent criminal action by her.
The prosecution said the evidence produced at her trial last year bore out the charge that she had inflicted huge damage on the state.
Tymoshenko's jailing for seven years last October soured the former Soviet republic's relations with the European Union, which sees her as a victim of selective justice by President Viktor Yanukovich, her political foe.
But, with a parliamentary election set for Oct. 28, the Yanukovich leadership has shown no signs of releasing her and are instead piling up other charges against her.
In a separate trial, which has been adjourned several times because of back trouble which has confined her to hospital, she is accused of embezzlement and tax evasion going back to alleged offences when she was a businesswoman in the 1990s.
With Tymoshenko absent in a state-run hospital in the city of Kharkiv, the appeal hearing in Kiev has also been adjourned several times. But it went ahead on Thursday after her lawyers said Tymoshenko wanted proceedings to continue in her absence.
Yanukovich's government says the 2009 deal, which ended a crisis between Ukraine and Russia, its main supplier of natural gas, saddled the country with an exorbitant price for gas imports which had been a millstone on the economy since.
Laying out the basis for the appeal, her lawyer, Olexander Plakhotniuk, told the court: "I consider that the sentence of the court (last October) is unlawful. The court incorrectly applied criminal law and this is the basis for overturning the sentence."
"I appeal to the court to overturn the judgment and halt the case against Yulia Tymoshenko on the grounds of a lack of criminal action," he said.
"Tymoshenko carried out political actions ... She was not in the position to be able to act otherwise," Mykola Siry, another of her defence lawyers, said.
If the conviction was allowed to stand, it would mean that Ukraine had overturned the rules of law. "It will throw the development of Ukraine in reverse," he said.
But state prosecutor Oksana Drogobytskaya said the arguments put forward by the defence contradicted all the evidence supporting a criminal case.
"When we have clear figures of damage to the state carried out by the accused, the assertion by the defence that there is no criminal action in the activities of Tymoshenko sounds a little strange from a judicial point of view," she said.
Some parliamentary supporters of Tymoshenko tried to nail up on the courtroom's wall a reproduction of a Renaissance painting depicting a corrupt judge being flayed alive, Interfax news agency said.
Judge Stanlislav Myshchenko warned them that they would be expelled if there were further attempts to disturb court proceedings. "You're not in parliament now. If I have to speak to you again, it will be to send you out of the courtroom," he said.
Tymoshenko has denied betraying the national interest and says she is the victim of a vendetta by Yanukovich who beat her for the presidency in a run-off in February 2010.
Tymoshenko was a leader of the 2004 Orange Revolution protests which derailed Yanukovich's first bid for the presidency, but failed to produce a strong unified government.
Since Yanukovich defeated her in the presidential election, some of her opposition allies have also faced corruption-related charges.
In the political fall-out from her prosecution, the European Union shelved key agreements on political association and free trade with Ukraine, while the United States has also criticised the court action against her as politically motivated.
Separately, the Tymoshenko camp has also turned to the Strasbourg-based European Court for Human Rights.