Britain is suffering a "crisis of identity" on the world stage which has seen it sidelined in dealing with international crises, a panel of experts has warned.
The London School of Economics diplomacy commission said that while the UK had the connections and capabilities to make a significant global contribution, it had become the "reluctant internationalist".
It said there was "a great deal of disquiet" among the British diplomatic community at the "lack of clear purpose" in foreign policy and called on the country to re-establish itself as an "agenda setter and coalition enabler" across a range of international challenges.
The commission is made up of former diplomats, academics and journalists including former security minister Baroness Neville-Jones, ex-MI6 chief Sir Richard Dearlove, and former ambassador Sir Christopher Meyer.
It said that for almost a decade, successive prime ministers and foreign secretaries had shied away from significant foreign policy engagements in the wake of Britain's involvement in the Iraq war.
"Today, Britain is increasingly insular and self-absorbed: an uncertain internationalist; sidelined in Syria, ineffective in Ukraine, unwilling in Europe, inimical on refugees. A crisis of confidence has become a crisis of identity," it said.
"The UK is a significant global power. But there is a great deal of disquiet among the UK's diplomatic community that British foreign policy lacks a clear purpose, and that as a result there is an approach to the distribution of resources that lacks strategic coherence."
The Government's ambivalence towards European integration, its approach to immigration and the refugee crisis, and a dominance of narrow commercial interests in foreign policy were, the commission argued, threatening to undermine economic dynamism and damage Britain's reputation as an open and fair society.
While the UK's diverse society, language, centrality to global finance and significant "soft power" meant it should be "comfortable punching its considerable weight" internationally, it would require new investment in the "tools of diplomacy" which had been eroded over the past decade to do so.
"The UK is a significant international actor, but in recent years it has been at best absent from key global debates and at worst actively insular, with foreign policy dominated by narrow commercial concerns," said Nicholas Kitchen, the commission's executive director.
"We need a change in strategic mentality that recognises the key role of diplomacy in sustaining our networks and connections, and that enables the UK to be at the table on international issues and prepared to do more than just its fair share."