The international community will "pay a very high price" if it fails to take clear action over the Ukrainian crisis and must put down a "clear warning" to Moscow, David Cameron has said.
European leaders must set out the consequences Moscow will face for the annexation of Crimea - including further action on travel bans and asset freezes, at a European Council tomorrow, the Prime Minister said.
Fears are growing of a major escalation in violence in Crimea after two people died in clashes between Ukrainian and pro-Russian forces.
Mr Cameron said: "If we turn away from this crisis and do n't act we will pay a very price in the longer term."
He told the Commons the Crimean referendum had been "spatchcocked" together in the space of 10 days "at the point of a Russian Kalashnikov".
The Prime Minister added: "I also think we should be responding to the fact of this annexation. We said that if there was further action to destabilise the Ukraine, and this annexation is that action, further consequences need to follow.
"We need to set that out on Thursday, in concert with our European partners and at the same time I think we need to put down a very clear warning that if there was further destabilisation - for instance going into the eastern Ukraine in any way - then we would move to a position of the sorts of economic sanctions that we discussed last week."
Labour leader Ed Miliband said his party would back "the toughest possible" economic and diplomatic measures against the Russian Federation.
Britain is backing a call from US president Barack Obama for leaders of the G7 nations - the US, UK, Germany, France, Italy, Japan and Canada - and the EU to meet to discuss the Ukraine crisis on the fringes of a nuclear security summit in the Netherlands next Monday.
Mr Cameron said: "I think it is important we move together with our allies and partners and I think we should be discussing whether or not to expel Russia permanently from the G8 if further steps are taken."