David Cameron has given his strongest indication yet that the G8 meeting in Russia will be abandoned in a continuing stand-off over Moscow's intervention in Ukraine.
The Prime Minister said it was "hard to see" how the gathering of the powerful group of nations could go ahead in Sochi in June, and insisted "nothing should be off the table" in terms of sanctions.
The comments came after Foreign Secretary William Hague warned he was "not optimistic" of making progress in talks with Russian counterpart Sergey Lavrov in Paris later.
Speaking at Prime Minister's Questions in the Commons, Mr Cameron said it was important that the hastily assembled European Council meeting tomorrow showed "unity of purpose and a clear voice".
"What I think we need to do is first of all be absolutely clear that the status quo we are faced with today, where Russian troops are outside their bases in the Crimea, is unacceptable.
"As I have said, costs and consequences need to follow from that. That is why, for instance, we have suspended preparations for the G8 meeting. Indeed, it is hard to see in these circumstances how a G8 meeting can properly go ahead."
The premier said: "When we look at the diplomatic, economic and political steps we can take, nothing should be off the table."
Mr Cameron said there had been "some contacts between Russian ministers and Ukrainian ministers".
"There has been some progress in putting together a contact group ... to start having a group of countries around Russia and Ukraine to encourage such dialogue to take place. That is the single most important thing that could happen to de-escalate the situation," he said.