Ukraine's ousted president has warned of civil war in his country, as officials from Western powers gathered in London to discuss possible sanctions in response to the current crisis.
Viktor Yanukovych, who fled to Russia in February after months of protests against his regime, criticised the West for supporting what he termed a "bandit regime" which has taken power in Kiev and said he intended to return soon to Ukraine.
Mr Yanukovych appeared on Russian TV speaking from the city of Rostov-on-Don, near the Ukrainian border.
He repeated Moscow's claims that the new Ukrainian government is in thrall to radical nationalists and alleged that it could use military force against Russian-speaking eastern Ukraine, pushing the country towards civil war.
The former president is among 18 Ukrainians subjected to asset freezes by the European Union, amid suspicions that he and his inner circle may have siphoned off vast sums from the former Soviet state.
Officials from the UK, US, Italy, France, Germany, Poland, Switzerland, Japan, Turkey and Canada, meeting at the Foreign Office in London, were considering whether the measures can be extended internationally.
They were working on the criteria for selecting which members of the Russian administration could be hit by asset freezes and travel bans for their role in violating Ukraine's sovereignty, following the takeover of Crimea by pro-Moscow forces.
Decisions on the level of EU sanctions against Russia and the pace at which they could be phased in are likely to be taken when foreign ministers meet in Brussels on Monday, followed by a scheduled summit of leaders of the 28-nation bloc on March 20.
A referendum is set to be staged in Crimea on Sunday on whether the strategically-important peninsula, which has an ethnic Russian majority, should join the Russian Federation.
Mr Cameron told MPs yesterday that the EU is ready "rapidly" to implement sanctions against key figures in Vladimir Putin's administration if Russia fails to come to the negotiating table with the government of Ukraine within days in a new Contact Group to seek a peaceful resolution to the crisis.
The Prime Minister ac knowledged that sanctions against Russia could have consequences for the UK, but warned Britain's own security and prosperity would be at risk if countries were able to flout international rules without facing consequences.
The European Council agreed that any "further unacceptable steps" to destabilise Ukraine by Moscow would lead to "additional and far reaching consequences" covering a broad range of economic areas, he added.
But Mr Cameron added: "There is still an opportunity for Russia to resolve this situation diplomatically.
"They should engage in direct talks with the Ukrainians, return Russian troops to their bases in Crimea, withdraw their support for this illegal and unconstitutional referendum in Crimea, and work with the rest of the international community to support free and fair elections in Ukraine in May.
"I am not interested in a tug of war. Ukraine should be able to choose its own future and act as a bridge between Russia and Europe."
The Ministry of Defence (MoD) last night said it would deploy an RAF reconnaissance plane over Poland and Romania as part of Nato's efforts to monitor the crisis in Ukraine.
A MoD spokeswoman said that a single RAF plane and pilot would be involved in the mission.
The spokeswoman said: "The North Atlantic Council on Monday decided to employ Awacs (Airborne Early Warning and Control Aircraft) reconnaissance flights over Poland and Romania, as part of the Alliance's efforts to monitor the crisis in Ukraine.
"We have said that the UK will meet all our commitments under the next level of Nato Crisis Response measures.
"As the UK E-3D Awacs (Airborne Early Warning and Control Aircraft) is part of the Nato Awacs Force, then it is only right that the UK undertakes its share of this mission."
If approved, any asset freezes or travel bans on the Russian regime are not expected to be targeted at leading politicians such as Mr Putin and his foreign minister Sergey Lavrov, who the international community hopes to engage in talks on the situation in Ukraine.
A final decision on whether the EU introduces sanctions could be reached at the foreign ministers' summit on Monday, though the bloc's processes allow it to be taken earlier if circumstances demand.
Non-EU countries at today's meeting will follow their own independent processes in deciding what sanctions to impose, but are thought to want to make a co-ordinated response.
Mr Cameron's official spokesman said that, if the EU and its partners decide to move to the next phase of sanctions against the Russian administration, their focus is expected to be on "officials who have links to the action that has been taken with regard to the violation of Ukrainian sovereignty".
The decision on implementing sanctions will come "very much in response whether or not there is a dialogue between Ukraine and Russia", said the spokesman. "We want to see that in the next few days. We want de-escalation and we want dialogue to start."