European soccer's governing body said Ukraine had been given one week to resolve the situation and that a suspension would make it impossible for the country to stage the 2012 tournament along with Poland.
"It is clear that if the Ukraine federation is suspended from membership, it would not be tenable to play the final round of the Euro 2012 in Ukraine," UEFA general secretary Gianni Infantino told reporters.
Ukraine have also been dogged by delays in building stadiums and other infrastructure and the announcement came just a month after the country's preparations were given a clean bill of health by UEFA.
"We discussed this and we have written a letter to the football federation of Ukraine requesting, as FIFA did, that the necessary concrete steps are taken and confirmation provided this has ceased," Infantino said.
"We are confident that this situation can be solved swiftly to the satisfaction of everyone," he added.
"Political interference is banned, it's something we cannot allow.
"It's quite a complex matter. essentially, it's about political interference in the running of the federation.
"A general assembly was scheduled on December 15, 2010, which was not completed due to this interference."
Infantino said FIFA and UEFA had received documents showing that some state and regional authorities were putting pressure on delegates. FIFA warned the FFU this week against trying to dismiss its president Hrigory Surkis before his current term which expires after Euro 2012 is over.
Several FFU members tried unsuccessfully in December to sack Surkis who has been accused by some fans of favouring Dynamo Kiev, a team run by his brother Ihor.
Surkis's opponents have said they will continue to seek his dismissal despite the FIFA warning.
The soccer scene in Ukraine reflects competing interests among major oligarchs and Ukrainian media reports said several key figures in the political establishment, including Euro 2012 minister Borys Kolesnikov, wanted Surkis out.
Surkis's spokesman Sergei Vasilyev welcomed the move by UEFA.
"I hope now that common sense and a sense of self-preservation will prevail with opponents (of Surkis)," he said.
IMPOSSIBLE TASK
Infantino said the whole situation made it impossible for the Ukrainian federation to work efficiently.
"We have a fantastic event ahead of us and everyone has to be on the same side and pull in the same direction," he said.
Infantino, who said UEFA was not thinking of a contingency plan at this stage, said that if nothing has changed by February 4, then the ruling body's emergency committee would have to decide on a suspension.
"A suspension means that the clubs cannot take part in our competitions, and we have still three clubs, one in the Champions League and two in the Europa League.
"The nati
