Hundreds are fighting in "pro-Russian units", the Ministry of Defence said.
The Kremlin critic just posted his first video since his failed June coup.
More of the mercenaries are gathering in Belarus, which borders several Nato members.
The foreign affairs committee said the UK underestimated the mercenaries for years.
Intelligence shared with The Washington Post shows the Russian president was warned about Yevgeny Prigozhin's plans “at least two or three days” in advance.
The MoD claims the Wagner Group will no longer recruit Russian convicts to its ranks.
Sir Richard Moore claimed: "Their secrets will be safe with us."
Evidence is mounting that Sergei Surovikin has been "sidelined", according to UK intelligence.
The face-to-face talks lasted nearly three hours.
Meanwhile, it's still not clear where Yevgeny Prigozhin actually is.