By Pavel Polityuk and Natalia Zinets
KIEV (Reuters) - Software glitches mean thousands of Ukrainian officials will not meet an April deadline to declare their 2016 assets online, officials said, in a further blow to a flagship anti-corruption scheme championed by Kiev's Western supporters.
Kiev rolled out an initiative last year obliging MPs and officials to publish their wealth in a public database. The scheme, however, has been mired in controversy and activists say vested interests have repeatedly tried to sabotage it.
Its fraught launch in October, after months of delay, underscored the patchiness of Ukrainian efforts to deliver on reforms promised to allies and the International Monetary Fund as part of a $40 billion bailout for its economy, torn by conflict with pro-Russian separatists in the nation's east.
At a televised cabinet meeting, Prime Minister Volodymyr Groysman blamed the anti-corruption agency NAZK for the hold-up and called on NAZK's members to resign en masse.
At the same meeting, NAZK's chief said it wasn't responsible for how the software functioned and blamed another state agency.
In a separate development, the NAZK deputy head announced on Facebook that the U.S. Agency for International Development (USAID) had suspended its cooperation with NAZK.
The U.S. Embassy in Kiev did not comment while NAZK's chief denied that all cooperation had ended.
"You are not able to organize the work of your site and you put all people at risk of spending two years in prison," Groysman told NAZK chief Natalia Korchak, referring to the penalty for not filing declarations. "And there are hundreds of thousands of such people in our country."
NAZK spokeswoman Oksana Voronkova, asked when the database would work again, said: "We were promised that the registry will work from 4 p.m. (1300 GMT). The indication on the website shows that the system is working but I cannot log in."
Corruption is endemic in the ex-Soviet republic. Critics says oligarchs control vast wealth, investors are routinely sponged for money and public officials, from lawmakers to judges to prosecutors, take large bribes. The Economy Ministry reckons around 35 percent of Ukrainian GDP runs in a shadow economy.
Nevertheless, the wealth declarations of leading politicians and officials stunned Ukrainians last year, as officials on modest salaries declared millions of dollars in cash, expensive watches or luxury cars.
But anti-corruption activists say a recent legislative amendment forcing NGOs to declare their assets too would open them up to intimidation from law enforcement agencies with a vested interest in shutting down corruption investigations.
Activists say corrupt judges, prosecutors and police, in cahoots with lawmakers and businesses, are trying to hobble Ukrainian reforms to preserve a profitable status quo.
British Ambassador Judith Gough said forcing NGOs to declare their wealth was a "serious step back" and tweeted that it "could limit NGOs capacity, expose them to pressure and affect reform. Needs urgent review."
NAZK deputy chief Ruslan Riaboshapka said USAID had put its future cooperation with the agency "on hold" because of the change in the e-declaration law.
Previously, USAID ended funding for a flagship customs reform project in the southern Odessa region as plans to tackle bribe-taking there petered out.
(Writing by Matthias Williams; editing by Mark Heinrich)