THE European Union will today ramp up the pressure on Vladimir Putin and his government with the announcement of fresh targeted sanctions against Russia as Nato leaders lined up to show solidarity with Ukraine.
UK Government sources said the EU would unveil measures, which would include sanctions targeting state-owned Russian defence and energy companies.
They will also look to strengthen existing measures against state-owned banks, freeze the assets of more of Mr Putin's cronies and extend controls on the sale of military equipment to cover dual-use civilian military kit. It is expected the White House will announce similar measures against Moscow so that there is more of a co-ordinated approach.
One Coalition insider said the sanctions were designed to force the Russian President "to the negotiating table and off the battlefield" in eastern Ukraine.
Earlier, David Cameron pointed out existing sanctions were hurting the Russian economy.
The Prime Minister said: "It is making a difference. The Russian economy was growing, it is now shrinking. Russian banks - some of them are getting short of money. The Russian stock market, the rouble, have suffered.
"What Russia needs to understand is that if they continue with this approach in Ukraine, this pressure will be ramped up. The Ukrainians know they have our support and this sanctions pressure is the right way to tell the Russians that what they are doing is unacceptable."
Deputy Prime Minister Nick Clegg said he was "fully in favour" of the extension of sanctions on Russia. "It is essential," he said, "that every time Vladimir Putin thinks he can carry on with impunity, he understands that there is a reaction in terms of further sanctions being applied."
The Kremlin reacted angrily to France's decision to suspend the delivery of a warship to Russia, claiming Paris had bowed to pressure from Washington.
"Where are the times when Paris did not cave in to pressure from the United States, as, for example, over Iraq?" noted Maria Zakharova, Russia's Foreign Ministry deputy spokeswoman.
Mr Cameron's spokesman said the PM would regard France's decision as a straightforward reaction to Russia's actions in eastern Ukraine and another clear signal to Mr Putin of the consequences his country's actions could have.
Petro Poroshenko, the Ukrainian President, who attended a special Nato session on the Ukrainian crisis at the Nato summit in Newport, South Wales, described the summit as a "landmark event".
He welcomed the offers of logistical and financial support which had been made by several Nato heads of government and accused Russia of "brutally undermining" stability and security in his country.
Speaking at a press conference alongside Anders Fogh Rasmussen, the Nato Secretary General, he said: "I have never felt such a strong, enormous support from all the leaders of the countries, heads of government and representatives of the people of Nato member states as was demonstrated today for Ukraine.
"It is definitely a landmark event of the highest level in the 20-year history of the partnership between Ukraine and Nato.
"The new security situation created by this aggression calls for our joint action to counter the emergent security challenges and shape a new strategic framework of Nato-Ukraine co-operation."
Mr Rasmussen said Nato and its member states had agreed to provide Ukraine with financial assistance as well as help with cyber-defence, logistics, command and control and communications capability and rehabilitation of injured troops.