By Alissa de Carbonnel and Pavel Polityuk
KIEV, Dec 8 (Reuters) - Crowds toppled a statue of Soviet state founder Vladimir Lenin in the Ukrainian capital and attacked it with hammers on Sunday in the latest mass protests against President Viktor Yanukovich and his plans for closer ties with Russia.
The statue's felling - a symbolic rejection of Moscow's power - came after opposition leaders told hundreds of thousands of demonstrators to keep up pressure on Yanukovich to sack his government.
A Reuters reporter at the scene saw the protesters breaking up the statue with hammers after using ropes and metal bars to bring it crashing down.
The demonstrators are furious with the Yanukovich government for its decision to ditch a landmark pact with the European Union in favour of a trade deal with Moscow, Ukraine's Soviet-era overlord.
Yanukovich's sudden tack towards Russia has provoked the biggest street protests since the 2004-5 Orange Revolution, when people power forced a re-run of a fraud-tainted election and thwarted his first run for the presidency.
Sunday's rally marked a further escalation in weeks of confrontation between the authorities and protesters that have raised fears for political and economic stability in the former Soviet republic of 46 million people.
"This is a decisive moment when all Ukrainians have gathered here because they do not want to live in a country where corruption rules and where there is no justice," said world heavyweight boxing champion-turned-politician Vitali Klitschko.
European Commission President Jose Manuel Barroso urged Yanukovich in a phone call on Sunday to seek a dialogue with his opponents and to respect civil freedoms, the EU executive said. EU foreign policy chief Catherine Ashton will visit Kiev this week to help seek a way out of the crisis, it said.
Interfax news agency said Yanukovich also discussed the situation in Ukraine with U.N. Secretary-General Ban Ki-moon.
Ukraine's opposition accuses Yanukovich, who met Russian President Vladimir Putin on Friday, of preparing to take the country into a Moscow-led customs union, which they see as an attempt to recreate the Soviet Union.
"We are on a razor's edge between a final plunge into cruel dictatorship and a return home to the European community," jailed opposition leader Yulia Tymoshenko said in an emotional message to the crowd, read out by her daughter Yevgenia.
Yanukovich has said he decided to shelve the EU trade deal because it would have been too costly for Ukraine's struggling economy and the country needs more time to prepare for such a move. He says he is preparing a "strategic partnership" with Russia, but has not committed to joining the customs union.
Both countries denied that Putin and Yanukovich discussed the union when they met on Friday in the Russian Black Sea resort of Sochi, but further talks are planned for Dec. 17.
Yanukovich and Putin, who regards Ukraine as strategically vital to Moscow's own interests, are widely believed to have struck a bargain whereby Ukraine will get cheaper Russian gas and possibly credits in exchange for backing away from the EU.
Klitschko, who appears to be emerging as a possible leader-in-waiting, told protesters they would achieve their aim, though he stressed the need to stay peaceful.
Last weekend, riot police beat protesters and journalists, triggering EU condemnation and swelling the protesters' ranks.
"We do not want to be kept quiet by a policeman's truncheon," Klitschko told Sunday's crowd.
He demanded the release of political prisoners, punishment of those responsible for last weekend's crackdown, the resignation of Prime Minister Mykola Azarov's government and early presidential and parliamentary elections.
A group of protesters, chanting "revolution", started erecting tents and barricades near the government building, apparently aiming to halt normal government activity next week. Riot police stood guard nearby.
"We are getting ready for when the police come," said a 22-year-old man draped in a Ukrainian flag who gave his name as Sergei. "We will stay till our demands are met and there is a change of government. We don't want to be under Russia's thumb."
Around 100 protesters erected four tents and two barricades at a separate site near the president's offices.
Independence Square, nucleus of the protest movement, has been transformed into a makeshift village of tents, festooned with national blue and yellow flags and EU flags, beneath a big television screen. People huddle around braziers for warmth.
In a gesture sure to annoy Yanukovich, protesters hoisted a huge portrait of Tymoshenko onto a New Year tree, plastered with anti-government placards, that towers over the square.
The protest camp has been swelled by huge numbers arriving from Ukrainian-speaking parts of western and central Ukraine, where the opposition enjoys strong support.
A Tymoshenko ally, former interior minister Yuri Lutsenko, appealed to people in Russian-speaking areas of the east - the bedrock of Yanukovich's power - to turn out and join the protests. "We are the same people as you are, except that they stole from you earlier," he said.
Sales worker Sviatislav Zaporozhit, 26, said: "The current authorities have been completely discredited by their actions and the police brutality. What unites everyone here is a desire to see a change of government.
"I don't want to go back to what my parents lived under the Soviet Union ... When I am old, I want to live like people in Europe. I want to live in a normal country." (Additional reporting by Richard Balmforth and Natalia Zinets; Writing by Gareth Jones; Editing by Mark Trevelyan)