Boris Johnson vowed to unveil the 'first barrage' of sanctions against Russia today as he warned Vladimir Putin is bent on a 'full scale invasion of Ukraine'.
After chairing a pre-dawn Cobra meeting, the PM said Mr Putin has 'completely torn up international law' after recognising separatist areas and must now face an 'immediate' response.
Key Russian figures and businesses are expected to be in the crosshairs when Mr Johnson announces the package in a Commons statement at lunchtime.
Tanks have been seen rolling across the border after Russian troops were ordered to carry out 'peacekeeping' duties in the Donetsk and Luhansk regions.
However, there are signs of divisions among Western allies - many of whom rely heavily on Russian gas and oil - over how strongly to react to the breach.
Mr Johnson said sanctions will be aimed not just at entities in occupied Ukraine regions but also 'in Russia itself, targeting Russian economic interests as hard as we can'.
After chairing a pre-dawn Cobra meeting, the PM said Mr Putin has 'completely torn up international law' after recognising separatist areas and must now face an 'immediate' response.
A tank, believed to be Russian, is spotted on a street near the city of Donetsk in separatist-held regions of eastern Ukraine
Putin addresses the nation as he recognised the independence of the Donetsk and Lugansk People's Republics on Monday
'This is I should stress just the first barrage of UK economic sanctions against Russia because we expect I'm afraid that there is more Russian irrational behaviour to come.
'I'm afraid all the evidence is that President Putin is indeed bent on a full scale invasion of the Ukraine, the overrunning, the subjugation of an independent, sovereign European country and I think, let's be absolutely clear, that will be absolutely catastrophic.'
The White House has issued an executive order to prohibit US investment and trade in the separatist regions, and additional sanctions are expected to be announced later.
However, France has urged for sanctions to be 'targeted' and it could be harder to agree a strong response to recognition of the separatist areas than to a full invasion.
Josep Borrell, the EU's foreign policy chief, avoided using the word as he vowed sanctions against Russia this morning.
He acknowledged that 'Russian troops are on Ukrainian soil' but added: 'I wouldn't say that's a fully fledged
