Leonid Kuchma is expected to keep his luxury residence

A government spokesman said Mr Kuchma's privileges contradicted the law on benefits for former leaders and would be scaled down.

Mr Kuchma's initial package - approved by the previous government days before he left office - included a pension, two cars and four drivers.

He was replaced by Viktor Yushchenko after November's disputed elections.

Under the new arrangements - in line with the 1992 law on benefits for ex-presidents - Mr Kuchma will receive a reduced pension and have less staff.

But Mr Kuchma, who was president for 10 of the 13 years after the country gained independence from the Soviet Union, is expected to keep the use of his presidential residence outside the capital.

The BBC's Helen Fawkes, in Kiev, says the move will come as no surprise to the former president, as the arrangements for Mr Kuchma's retirement had been criticised by the new administration.