Ukrainian forces have made “orderly withdrawals” from parts of the eastern town of Bakhmut after the Russian military stepped up its attacks, British defence chiefs said on Friday.
However, Ukrianian units were still holding western districts despite “particularly intense Russian artillery fire over the previous 48 hours”.
Vladimir Putin’s Wagner Group “private army” was believed to be working more closely with regular Russian forces having previously clashed publicly over ammunition supplies.
In its latest intelligence update, the Ministry of Defence in London said “Russia has re-energised its assault on the Donetsk Oblast (province) town of Bakhmut as forces of the Russian MoD and Wagner Group have improved co-operation.
“The Ukrainian defence still holds the western districts of the town but has been subjected to particularly intense Russian artillery fire over the previous 48 hours.”
The briefing added: “Wagner assault groups continue to conduct the main advance through the centre of town, while Russian airborne forces (VDV) have relieved some Wagner units securing the northern and southern flanks of the operation.
“Ukrainian forces face significant resupply issues but have made orderly withdrawals from the positions they have been forced to concede.”
Kyiv had considered retreating from Bakhmut but has defended it as Russian forces have suffered very high losses.
Ukrainian military commanders are believed to be seeking to weaken the Russian army before launching their own counter-offensive within weeks after Putin’s spring advances failed to make any significant breakthroughs.
The West has supplied Ukraine with battle tanks, including British Challenger IIs and German-built Leopards, as well as long range artillery, ahead of its counter-offensive.
Bakhmut, which had a population of around 70,000 people before the war, has been Russia's main target in Putin’s widespread offensive which has seen infantry ground combat of an intensity unseen in Europe since World War Two.
Capturing the town would be Russia's first substantial victory in eight months. Moscow says it would open a route to capturing more territory in Ukraine's eastern Donbas region, a major war aim.
Ukraine had appeared likely to abandon Bakhmut at the end of February, but announced in March it would fight on there, saying Russia was taking higher casualties trying to storm it.