Western sanctions on Russia may have to deal with unconventional invasion: Official

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Russia is ready to invade Ukraine but the Kremlin could use an unconventional attack on its former Soviet neighbour which might require the West to make a swift judgment call on the imposition of Russian sanctions, a senior Western official said.

Russian-backed separatists in eastern Ukraine said on Friday they planned to evacuate their breakaway region's residents to Russia, a stunning turn in a conflict the West believes Moscow could use to justify an invasion of Ukraine.

Russia denies Western accusations it is planning an all-out invasion of Ukraine and Russian President Vladimir Putin has accused the West of ignoring Moscow's concerns about the post-Cold War enlargement of NATO.

"The Russians are ready to go if they chose to do that," a senior Western official said on condition of anonymity.

Britain has threatened to block Russian companies from raising capital in London and to expose property and company ownership if Russia invades Ukraine. British Prime Minister Boris Johnson has said the government would target Russian banks and Russian companies.

Western security sources have repeatedly cautioned that Russia could use so called hybrid warfare – attacks which exploit vulnerabilities often by forces which cannot be directly linked to the state.

"Under one scenario, there might be a very clear day one in all of this," the Western official said. "There are other scenarios under which the kinds of events we have seen over the last 48 hours continue and increase in intensity and frequency."

"In that situation, the reality is that it would be more difficult to call exactly when a line had been crossed," the official said. "When we judge that Russia crossed a line on this… then we need to act quickly and at scale in terms of our sanctions response."

Asked about market speculation that sanctions could be imposed as early as Friday, the Western official said he had not heard of any plans to do that on Friday.

"The Russians could act at any time. It is difficult to read into the mind of Putin but it could happen with very little or no notice."

Asked about the separatist evacuation, the official said: "We are seeing a continuing series of events which could be a series of pretexts for a Russian military action."

The Ukraine crisis, the official said, was entering its most dangerous phase to date.