Reports from Aleppo – Syria's largest city and commercial hub – said forces loyal to the Assad regime were using heavy artillery, planes and a helicopter gunship to bombard rebel positions in a battle that could determine the outcome of the 17-month uprising.
Fierce street fighting was reported in the Salaheddine district, a gateway into the city of 2.5 million people. Tanks pounded alleyways where rebels sought cover and state television said the Assad forces were "cleansing the terrorist filth" from the country, which has been sucked into a conflict that has killed some 18,000 people and could spill into neighbouring states.
Mr Hague warned that the regime's reliance on violence, rather than negotiations, in responding to challenges to President Assad's rule, could lead to "a collapse in all authority" in the Middle Eastern country.
And following the Russian and Chinese veto of British-backed resolutions at the UN Security Council and the resignation of peace envoy Kofi Annan, the Foreign Secretary said it may require a deterioration in circumstances on the ground to trigger a return to diplomatic efforts to stop the violence.
Britain is stepping up provision of non-lethal support, such as communications equipment, to opposition groups and is the second-largest provider of humanitarian aid to refugees fleeing the fighting, but is not supplying arms to the rebels.
Opposition commanders were yesterday said to be preparing for a "strong offensive" on Aleppo by Government forces, while in the capital Damascus, rebels were coming under attack by regime jets.
Mr Hague said: "There has been fighting in Aleppo over recent days, but it does seem the Syrian armed forces have been building up to something bigger.
"We are likely, sadly, to see even more fighting, more bloodshed, probably a bigger flow of refugees over the coming days.
"This is, I'm afraid, the situation we warned about for a long time – that there would be a collapse in Syria and an even more deadly conflict if we didn't bring enough pressure to bear on the Assad regime."
Following the kidnap on Saturday of 48 Iranian pilgrims during a visit to a Shi'ite shrine in Damascus, Mr Hague acknowledged the danger that Syria may spiral into sectarian conflict, and recognised elements of the opposition were driven by religious and ethnic rivalries. Rebels have claimed responsibility for the kidnapping and have said they are checking their identities to show that Tehran was involved in fighting for the Assad regime.
Iran has warned against foreign intervention in Syria and said the conflict there could engulf Israel. Ali Larijani, the Iran Parliament speaker, said on Saturday: "The fire that has been ignited in Syria will take the fearful [Israelis)] with it."
Iran and Russia support the six-point plan presented by former UN peace envoy Kofi Annan to solve the crisis. A frustrated Mr Annan resigned his post last week, blaming "finger-pointing and name-calling" at the UN Security Council for his decision to quit.
Iran has blamed the US and countries in the region for the failure of the plan.