Foreign Secretary Philip Hammond has accused Russian President Vladimir Putin of acting like a "mid-20th century tyrant" over Ukraine as he said the UK's bar on supplying weapons to Kiev would be "kept under review".
His comments to Sky's Murnaghan programme came as US Secretary of State John Kerry insisted there was no split with Europe over handling the crisis.
Germany's Angela Merkel has rejected sending arms to Kiev, as the US considers providing weapons to the Ukrainian military.
Mr Hammond told Murnaghan: "Britain's position is that at the moment we do no think that supplying arms is the right thing to do but obviously if the situation on the ground changes we'll keep that position under review."
And he insisted Western sanctions were having an impact.
Mr Hammond said: "When coupled with the catastrophic effect on the Russian economy of the decline in the oil price they are putting pressure on the Kremlin.
"Putin is toughing this out but we all know in the end the economic facts cannot be ignored.
"If your economy is cratering you cannot support the kind of foreign adventures Putin is undertaking.
"He will have to trim his behaviour to reflect the decline in the Russian economy."
The Secretary of State branded Moscow's annexation of Crimea illegal and said it must be reversed.
He said: "This man has sent troops across an international border and occupied another country's territory in the 21st century acting like some mid-20th century tyrant. Civilised nations do not behave like that."
"We do not see any reason to tolerate this kind of outrageous and outdated behaviour from the Kremlin."
Mr Putin is to discuss a peace plan for eastern Ukraine in a phone call with the French, German and Ukrainian leaders later.
German Chancellor Angela Merkel and French President Francois Hollande are leading diplomatic efforts to halt the bloody conflict, which has claimed the lives of more than 5,000 people since April.
At the Munich Security Conference on Saturday, Mrs Merkel said the bid to end the fighting was "uncertain but worth trying", while Mr Hollande also warned it was "one of the last chances for peace".
The plan is understood to centre on a failed peace deal agreed in Minsk last September.
However, territorial gains made by pro-Russian rebels since then raises doubts over whether they will respect the pact in its existing form.
Mr Hollande said the agreement could include a demilitarised zone and greater autonomy for the separatist eastern region.
Russian Foreign Minister Sergei Lavrov, also in Munich, said there were "good grounds for optimism" that the talks could secure a deal.
The diplomatic push comes against an escalation in violence between the separatists and Ukrainian forces in the east of the country.
In the latest fighting, the Ukrainian military said the pro-Russian separatists had increased shelling of government forces and appeared to be amassing for new offensives on the key railway town of Debaltseve and the coastal city of Mariupol.
Arguing sending weapons to Ukraine would not help end the crisis, Mrs Merkel said: "I understand the debate but I believe that more weapons will not lead to the progress Ukraine needs. I really doubt that."
But her stance has led to a sharp rebuke from hawks in Washington, who have accused Berlin of turning its back on an ally.
Republican US Senator John McCain said: "The Ukrainians are being slaughtered and we're sending them blankets and meals. Blankets don't do well against Russian tanks."
NATO's top military commander has also said sending weapons should not be ruled out.
US Air Force General Philip Breedlove told reporters at the Munich conference: "I don't think we should preclude out of hand the possibility of the military option."
But the US Secretary of State John Kerry has insisted there is "no split" with Europe over handling the Ukraine crisis.
"We are united in our diplomacy," he said.
On Saturday, US Vice President Joe Biden backed the Franco-German peace bid but made clear the White House stood ready to provide Ukraine with the means to defend itself.
He told the Munich summit: "Too many times President Putin has promised peace and delivered tanks, troops and weapons."
Addressing the conference, Ukrainian President Petro Poroshenko brandished several passports taken from Russian soldiers in what he claimed was proof of Moscow's "presence" in his country.
Russia has consistently denied backing the rebels.
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