Russian troops pull back amid Ukraine crisis talks

But the Government faces questions over the strength of the “costs and consequences” which Mr Hague has threatened, after a secret document suggested trade sanctions were off the agenda.

US Secretary of State John Kerry is due in the Ukrainian capital, Kiev, for talks with the country’s interim government amid speculation that America could unilaterally impose tough measures, with European nations holding back because of concern about the potential economic impact.

Members of the Nato defence alliance were meeting in Brussels after Ukraine’s neighbour Poland said it felt threatened by Moscow’s moves in the region. And leaders of European Union states, including Prime Minister David Cameron, are due to hold an emergency summit in Brussels on Thursday to discuss what action the 28-nation bloc can take.

It was unclear whether President Vladimir Putin’s order for troops to return to their permanent bases, reported early today by news agencies in Russia, was a response to Western calls to de-escalate the crisis, that followed last month’s revolution in Kiev which unseated pro-Moscow president Viktor Yanukovych.

The deployment last week of around 150,000 Russian troops on what the Kremlin claimed were long-planned exercises prompted concern in Kiev over the possibility of an intervention in eastern Ukraine, where a majority of the population are Russian-speaking.

US President Barack Obama said Russia was on “the wrong side of history” and faces growing isolation for violating Ukraine’s sovereignty, as the Pentagon confirmed that military engagements with Russia had been put on hold.

Markets fell sharply and oil prices rose yesterday in response to the escalating crisis, raising fears that it could harm fragile economic recoveries with Germany among countries dependent on Russian gas supplies.

But share prices rallied a little in the wake of Mr Putin’s order, with the FTSE 100 up 1 per cent in early trading.

Mr Cameron said the world needed to send a “clear message” to Mr Putin.

But efforts to spare the City of London any impact from the measure were exposed when a briefing paper being carried in by a senior security official was captured by a photographer in Downing Street.

“UK should not support, for now, trade sanctions... or close London’s financial centre to Russians,” it said - giving backing instead to visa restrictions and travel bans.

The paper, believed to have been in the hands of deputy national security adviser Hugh Powell, also confirmed the desire to stop even the discussion of any “contingency military preparations”.

Nato members are meeting for emergency talks because the developments “are seen to constitute a threat to neighbouring allied countries” and had “direct and serious implications” for security. Britain was being represented by Deputy Permanent Representative Patrick Turner.

Poland sought the gathering under a provision which allows for consultations when any member state feels their “territorial integrity, political independence or security is threatened”.

At the third meeting in four days of the United Nations Security Council, there was widespread condemnation of the actions of Russia, which claimed it had sent soldiers at the request of Mr Yanukovych, who is recognised by Moscow as the legitimate leader of Ukraine.

Russia’s envoy brandished what he said was a letter from Mr Yanukovich, who is in Moscow, calling on Mr Putin “to use the armed forces of the Russian Federation to establish legitimacy, peace, law and order”.

Moscow’s defence ministry denied that the commander of the Russian Black Sea fleet had issued an ultimatum to Ukrainian forces in the Crimea to surrender by 5am (3am GMT) or face attack. The deadline came and went without any apparent development.

Foreign Minister Sergey Lavrov is due to meet European Union foreign policy chief Baroness Ashton in Madrid as diplomatic efforts continue.

He says the action is about “the protection of our citizens and compatriots, about protection of the most fundamental of the human rights - the right to live and nothing more”.

Downing Street declined to comment on the leaked document but insisted that decisions on what actions should be taken would be made “in close collaboration with EU and G7 partners”.

As European leaders sought agreement over how to react, Mr Cameron spoke to German Chancellor Angela Merkel and French President Francois Hollande.

Downing Street said the trio had “agreed that the international community should speak with one voice and send a clear message to Russia that its actions in Ukraine were completely unacceptable”.

British Ambassador Mark Lyall Grant told the Security Council meeting there was “no justification” for Russian action.

He said: “The world can see that Russian military forces have taken control of the Crimean Peninsula, part of the sovereign territory of Ukraine. This action is against the expressed wishes of the legitimate Ukrainian government.

“It is a clear and unambiguous violation of the sovereignty, independence and territorial integrity of Ukraine, and is a flagrant breach of international law.

“Just as we condemn the Russian Federation for its confrontational acts, we commend the government of Ukraine for refusing to rise to provocation.”

Deputy Prime Minister Nick Clegg said there was “no pre-determined limit” on actions that could be taken against Russia short of military involvement.

He said: “Whilst British military participation is clearly not on the cards, I want to be clear that Russia will face a range of diplomatic and political and economic consequences if it carries on its current course.

“We are absolutely not ruling out now the kind of options we will look at in order to make it very clear to President Putin and the Russian Federation that there will be very real consequences.

“So there is no pre-determined limit on the kinds of measures we will look at, envisage, entertain, in order to safeguard the territorial integrity of Ukraine.”

SEE ALSO

• Peter Jones: Scotland left on the sidelines