Britain will press for a tough new round of economic sanctions against Russia as punishment for its "land grab" of Crimea, which has been justified by a "sham and perverse democratic process", William Hague has said.
As David Cameron warned that the illegal annexation of Crimea would send a "chilling message across the continent of Europe", the foreign secretary said the prime minister would press for the "strongest range of measures" at a European Union summit starting on Thursday.
Britain issued its warning shortly after the Russian president, Vladimir Putin, signed a bill to absorb the Black Sea peninsula into the Russian federation.
Hague told an emergency Commons debate on Ukraine that the international community should consider a new relationship with Moscow. This would involve expelling Russia from the G8, turning it back into the G7; permanently curtailing military co-operation and defence exports; and reducing the EU's dependence on Russian energy.
As a first step Britain will press at the EU summit for the third stage of sanctions, covering economic and financial measures, to be imposed on Russia. These would follow the travel restrictions and asset freezes, known as phase two, imposed on Monday against 21 named individuals in Russia and Ukraine who have allegedly been involved in violating Ukraine's territorial integrity. In the first phase, EU leaders agreed to break off negotiations over a new visa regime with Russia.
Hague told MPs: "In the British government we are clear: further measures need to be taken. In the light of President Putin's speech today we will argue at the council for the strongest position and range of measures on which agreement can be obtained in the EU."
He raised the prospect of further sanctions after Sir Malcolm Rifkind, the former foreign secretary, said that the sanctions against Russia had so far been pathetic.
Rifkind told MPs: "On the basis of the measures announced so far by both the US and the EU, on visa controls and asset freezes internationally, I say with great sadness that is a pathetic and feeble response that does not match the seriousness which those implementing these responses have themselves acknowledged we face at the present time.
"The issue is not simply one of Crimea. Crimea is of no strategic importance to Russia other than Sevastopol, and they have had control of Sevastopol for years. The Russian objective is quite well known. It is to effectively control all the areas of the Soviet state, not necessarily by re-integrating them into the Russian federation but by ensuring they become Russian dependencies."
Hague said Russia's annexation of Crimea was a sign of weakness by Moscow. "By treating the situation in Ukraine as a zero-sum strategic context Russia itself will lose strategically. Russia miscalculated its ability to control and influence the political situation in Ukraine in the events leading up to President Yanukovich's departure.
"By seizing Crimea, Russia has miscalculated again since it has alienated a huge majority of public opinion in Ukraine, done immense damage to Russia's reputation all over the world and increased the likelihood of European countries taking long-term action to reduce the balance of leverage in their relationship with Russia."
The foreign secretary condemned the referendum in which Crimeans overwhelmingly voted to return to Russia. "No amount of sham and perverse democratic process or skewed historical references can make up for the fact that this is an incursion into a sovereign state and a land grab of part of its territory with no respect for the law of that country or for international law. The referendum was clearly illegal under the Ukrainian constitution which states that the autonomous republic of Crimea is an integral constituent part of Ukraine, can only resolve issues related to its authority within the provisions of the constitution and that only the Ukrainian parliament has the right to call such referendums."
Douglas Alexander, the shadow foreign secretary who called for Russia to be expelled from the G8 last week, was critical of the EU's response. He told MPs: "Despite these important steps [taken by the EU] I regret so far that the EU's unity in condemning Russian military aggression has not been matched by a shared resolve to act more decisively in extracting costs and consequences for Russia's actions."
Cameron said: "The steps taken by President Putin today to attempt to annex Crimea to Russia are in flagrant breach of international law and send a chilling message across the continent of Europe.
"It is completely unacceptable for Russia to use force to change borders, on the basis of a sham referendum held at the barrel of a Russian gun. President Putin should be in no doubt that Russia will face more serious consequences and I will push European leaders to agree further EU measures when we meet on Thursday. The choice remains for President Putin: take the path of de-escalation or face increasing isolation and tighter sanctions."