The Government plans a ratcheting up of sanctions to “tighten the noose” around the Russian economy the longer any potential military action continues.

Liz Truss, the Foreign Secretary, views making Russian oligarchs “squeal” as a core part of the plan, and an ally said on Monday: “The Kremlin says it doesn’t care about sanctions – but that’s clearly not the view of Russian oligarchs and businesses.

“All sectors will be on the table, from energy to defence to banking, chemicals and technology. It’s part of our strategy to make Russian oligarchs squeal. It will be a surgical sanctions strike and very painful for Russia. It’s a clear deterrence.

“There will be a tough tranche of sanctions ready to go if the Kremlin attacks. We’ll be able to tighten the noose after that –there will be an upward ratchet. We’ll be able to increasingly apply pressure.”

Ms Truss is expected to give a statement to the Commons on Tuesday, updating MPs on the situation in Ukraine and the UK’s sanctions plan.

Speaking at the Munich Security Conference at the weekend, she told Russia that the UK and its allies were ready to impose “severe costs”.

Measures to block oligarchs transferring their money or travelling across the West could be enacted alongside moves making it tougher for Russian companies to raise finance on capital markets.