8 May 2014
Last updated at 16:21 ET
The move was announced by separatist leaders after consulting supporters.
On Wednesday, Mr Putin called for a postponement to create the conditions necessary for dialogue.
Ukrainian authorities say they will disregard the results and that "anti-terror" operations will continue.
Millions of ballot papers have been prepared for the referendum.
The decision to press ahead with the vote was announced by separatist leaders in the regions of Donetsk and Luhansk.
The leader in Donetsk, Denis Pushilin, said the decision had been unanimous.
"We just voice what the people want and demonstrate through their actions," he said.
A spokesman for the Kremlin said there was "little information" and that it needed to analyse the situation further.
The BBC's Steve Rosenberg in Moscow says Mr Putin may turn the separatists' decision to his advantage, claiming it is proof that Russia is not orchestrating events in eastern Ukraine - as claimed by the West.
Moscow has vowed to protect the rights of Ukraine's Russian-speaking population against what it calls an undemocratic government in Kiev.
Ukrainian authorities have rejected activist demands for greater autonomy and troops have been battling to regain official buildings occupied by rebels in the east.
The European Union weighed in on Thursday, warning that "such a vote could have no democratic legitimacy and would only further worsen the situation".
The separatists' decision to hold the referendum comes as a Pew Research Center poll released on Thursday shows that a strong majority of Ukrainians want their country to remain unified, even in the largely Russian-speaking east.
In related developments on Thursday:
Meanwhile Nato Secretary General Anders Fogh Rasmussen says there is no sign of a Russian troop withdrawal from the Ukrainian border, which Mr Putin announced on Wednesday.
Unrest in the south and east of Ukraine has worsened since Russia annexed the Crimean peninsula in March.
That followed the ousting of Ukraine's pro-Russian President Viktor Yanukovych in February by pro-Western protesters.
Ukraine crisis: Pro-Russia rebel vote to go ahead
Pro-Russian
activists in eastern Ukraine have decided to go ahead with an
independence referendum on Sunday, despite a call from Russian President
Vladimir Putin to postpone it.
On Wednesday, Mr Putin called for a postponement to create the conditions necessary for dialogue.
Ukrainian authorities say they will disregard the results and that "anti-terror" operations will continue.
Millions of ballot papers have been prepared for the referendum.
Continue reading the main story
In total 78 self-appointed "deputies" acting on behalf of those who no longer want to be part of Ukraine had taken the decision to ignore Mr Putin's suggestion that the referendum be postponed.
One of them, a man called Vladimir, told the BBC that they respected the Russian president. "But we have our own opinion and the people want a referendum like they had in Crimea," he said.
The head of the commission organising the referendum even joked that he was delighted Mr Putin had called for a delay. Thanks to the Russian president, he said, everyone even in the furthest corners of eastern Ukraine now knows about it.
At the scene
Inside the building which has become the headquarters of the pro-Russian separatists in Donetsk, there was an air of defiance. The leaders of the self-declared "People's Republic of Donetsk" flexed their muscles in front of the world's media, apparently demonstrating they would not be pushed around by Russia's Vladimir Putin.In total 78 self-appointed "deputies" acting on behalf of those who no longer want to be part of Ukraine had taken the decision to ignore Mr Putin's suggestion that the referendum be postponed.
One of them, a man called Vladimir, told the BBC that they respected the Russian president. "But we have our own opinion and the people want a referendum like they had in Crimea," he said.
The head of the commission organising the referendum even joked that he was delighted Mr Putin had called for a delay. Thanks to the Russian president, he said, everyone even in the furthest corners of eastern Ukraine now knows about it.
The question put to voters is:
"Do you support the act of proclamation of independent sovereignty for
the Donetsk People's Republic?''
The leader in Donetsk, Denis Pushilin, said the decision had been unanimous.
"We just voice what the people want and demonstrate through their actions," he said.
A spokesman for the Kremlin said there was "little information" and that it needed to analyse the situation further.
The BBC's Steve Rosenberg in Moscow says Mr Putin may turn the separatists' decision to his advantage, claiming it is proof that Russia is not orchestrating events in eastern Ukraine - as claimed by the West.
Moscow has vowed to protect the rights of Ukraine's Russian-speaking population against what it calls an undemocratic government in Kiev.
Ukrainian authorities have rejected activist demands for greater autonomy and troops have been battling to regain official buildings occupied by rebels in the east.
The European Union weighed in on Thursday, warning that "such a vote could have no democratic legitimacy and would only further worsen the situation".
The separatists' decision to hold the referendum comes as a Pew Research Center poll released on Thursday shows that a strong majority of Ukrainians want their country to remain unified, even in the largely Russian-speaking east.
- About 40 armed men attacked a border post in the Luhansk region but were repelled by guards, the Ukrainian border agency says
- In the south-eastern port city of Mariupol, the city hall changed hands for the third time in two days, with Ukrainian forces now back in control
- Russian Foreign Minister Sergei Lavrov spoke on the phone to US counterpart John Kerry and urged him to put pressure on Kiev "to begin a real de-escalation", the Russian foreign ministry said
- US Deputy Secretary of State William Burns reiterated the US position that Russia was stoking the unrest in eastern Ukraine, saying Moscow was heading down an "irresponsible path"
Continue reading the main story
"Having covered conflicts of identity in Northern Ireland, the Balkans and Africa the fears I hear expressed in eastern Ukraine have a chilling resonance”
The US and the European Union
have imposed sanctions against several Russian individuals and
businesses and threatened wider measures if Moscow interferes further in
eastern Ukraine.
Sunday's planned referendum was seen as a potential trigger for that.Meanwhile Nato Secretary General Anders Fogh Rasmussen says there is no sign of a Russian troop withdrawal from the Ukrainian border, which Mr Putin announced on Wednesday.
Unrest in the south and east of Ukraine has worsened since Russia annexed the Crimean peninsula in March.
That followed the ousting of Ukraine's pro-Russian President Viktor Yanukovych in February by pro-Western protesters.
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