Liz Truss said it means a much broader range of oligarchs and businesses could be sanctioned because of their significance to the Kremlin.

Until now, the UK was only able to sanction those linked to the destabilisation of Ukraine.

'Nothing is off the table'

"Whether you support Russia's aggressive actions against Ukraine, or you're of wider significance to the Kremlin, we will have the power to sanction you," Ms Truss said.

"Nothing is off the table and there will be nowhere to hide.

"This will amount to the toughest sanctions regime against Russia we have had in place yet, and mark the biggest change in our approach since leaving the European Union."

Britain has so far imposed sanctions on around 180 people and 48 entities such Russia invaded Ukraine and annexed Crimea in 2014.

The prime minister's official spokesperson said: "The Russian elite should be in no doubt that we have significant powers and will take them further, which will place massive pressure on them should they continue on this path of aggression."

Kremlin says sanctions will backfire

It comes after the Kremlin said the UK's threats to impose economic sanctions were alarming and warned such actions would backfire by hurting British companies.

Kremlin spokesman Dmitry Peskov said the threat was an attack on Russian businesses. He said it undermined Britain's investment climate and inflamed tensions in Europe.

Mr Peskov told a briefing that Russia will respond to any such action in a way that would be based on its interests.

Tensions at UN Security Council

The tension between the sides was obvious during Monday's UN Security Council meeting, which had been requested by the US to discuss Moscow's troop build-up.

Russia's UN ambassador Vassily Nebenzia said US talk of war was "provocative", adding that there was "no proof" Moscow was planning military action in Ukraine.

But US ambassador to the UN Linda Thomas-Greenfield said: "The provocation is from Russia, not from us or other members of this council."

China called for the various parties not to aggravate the situation, adding that it did not view Russia's troops on the Ukraine border as a threat.

PM and foreign secretary to meet Ukrainian president

Meanwhile, Downing Street has said Boris Johnson and Ms Truss will travel to Kyiv for talks with Ukrainian President Volodymyr Zelenskyy on Tuesday.

On Monday, the prime minister told reporters he will tell the leader to "step back from the brink".

Mr Johnson said further incursion into Ukraine would spell "disaster for Russia".

During a visit to the Port of Tilbury in Essex, the PM said: "What I will say to the president, as I've said before, is that I think we really all need to step back from the brink and I think Russia needs to step back from the brink.

"I think that an invasion of Ukraine, any incursion into Ukraine beyond the territory that Russia has already taken in 2014 would be an absolute disaster for the world, but above all it would be a disaster for Russia."

Defence secretary says eastern European countries will experience consequences of instability

Britain's Defence Secretary Ben Wallace has travelled to Hungary for talks with the country's defence minister, Tibor Benko.

Mr Wallace said: "It's really important that President Putin hears from allies and friends across Europe our disquiet and our worries about what is happening in Ukraine. It's very important to deliver some clear messages."

Speaking in Budapest, Mr Wallace said countries such as Hungary need to tell Mr Putin they will experience direct consequences of any instability in the east.

"It is clear that we all are in agreement that we don't want instability, we don't want war in the east, we don't want casualties, we don't want migrant flows, we don't want high fuel prices and high food prices which would inevitably flow from any action."

US President Joe Biden has said Washington is ready for any scenario.

Mr Biden said he had productive talks last week with Mr Zelenskyy and is continuing to engage in diplomacy aimed at ratcheting down tensions along the Ukraine border.