Foreign Secretary Philip Hammond said the “cronies” around the Russian president could be included in measures after European leaders including David Cameron agreed on the need for tougher measures.
Mr Hammond acknowledged London could be affected by any restrictions on the flow of Russian money, and insisted other European countries would also have to take some of the pain of a more punitive sanctions regime.
The Foreign Secretary and counterparts from across the European Union will meet tomorrow to discuss the measures, which would build on existing sanctions imposed as a result of Russia’s involvement in the crisis in Ukraine.
The Prime Minister reached agreement with German Chancellor Angela Merkel and French President Francois Hollande that the EU should be ready to impose more stringent penalties on Russia.
French arms sales to the Russians and German imports of gas from Russia have been seen as possible barriers to tougher sanctions and Mr Hammond said there could also be a ban on investing in the Crimea – “sending a clear signal that we will not tolerate the illegal annexation of Crimea”.
Downing Street said officials were working with the relatives of the deceased.