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Ukraine separatists who are Russian-backed rebels fighting against Kiev announced on Tuesday the creation of a new "state" called Malorossiya to take the place of Ukraine and have its capital in their territory.

The proposed country -- which Agence France-Presse says in this report has no chance of getting off the ground -- would be founded after a referendum and given a tsarist-era name meaning "Little Russia" that once described most of the area covering modern-day Ukraine.

A constitution presented by rebel leader Alexander Zakharchenko said representatives from the insurgents' self-declared Donetsk and Lugansk "People's Republics" and other regions had agreed to "declare the establishment of a new state, which is the successor of Ukraine."

The document -- released by the separatists' news agency -- said rebel bastion Donetsk would become the capital, while Kiev would be reduced to the status of a "historical and cultural centre."

The surprise proposal is likely to draw scorn from Ukraine's pro-Western authorities in Kiev, who have been locked in a conflict with the Moscow-supported rebels since 2014 that has cost the lives of some 10,000 people.

It was not immediately clear why the rebels decided to put forward the new plan, but it is likely a gambit aimed at pushing forward their case in a stalled peace process.

A peace deal brokered by the leaders of Ukraine, Russia, France and Germany in 2015 has hit a wall as clashes drag on along the volatile frontline.

The latest move by the rebels could throw the troubled plan even further into doubt.

It echoed language used by Moscow in the early days of the conflict that promoted fears Russia was looking to annex swathes of mainland Ukraine after its seizure of the Crimea peninsula.

The Kremlin used the tsarist-era name "Novorossiya" (New Russia) to refer to the areas the rebels had seized, but the term was later dropped.

Ukraine and the West insist that Moscow has funneled troops and arms across the border to fan the flames of the war in Europe's backyard.

Moscow has denied the allegations despite overwhelming evidence that it has been involved in the fighting and its explicit political support for the rebels.

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Ukraine Separatists Declare New 'State' Called Malorossiya