Russia will face diplomatic, political, and economic pressure in response to its violation of Ukraine's sovereignty, David Cameron has said.
The Prime Minister, who chaired a meeting of the National Security Council to discuss the crisis, said that the world needed to send a "clear message" to Moscow.
Speaking in Downing Street, he said: "What we want to see is a de-escalation rather than a continuation down the path that the Russian government has taken, violating the sovereignty and territorial integrity of another country.
"So we shall have to bring to bear diplomatic, political, economic and other pressures in order to make this point.
"That is the very clear message the whole world needs to send to the Russian government."
Mr Cameron's intervention came amid reports that the commander of the Russian Black Sea fleet had issued an ultimatum to Ukrainian forces in the Crimea to surrender by 5 am (3am GMT) tomorrow or face attack.
The Russian defence ministry was subsequently quoted as dismissing the claims - emanating from Ukrainian defence sources - as "utter nonsense", but the reports did nothing to lessen the sense of deepening crisis.
Speaking in No 10, Mr Cameron said the reports were "deeply concerning", adding that "we all want to see stability and countries obeying the rule of law".
The Prime Minister said: "What matters now is that a very clear message is sent from across the world to the people of the Ukraine that we want to allow you to choose your own future; and an equally clear message to the Russian government that continuing down this path of violating the sovereignty of another country will have costs and consequences.
"The whole world needs to come together to deliver that message, it's important that the UN is at the forefront of that message which is why I spoke to secretary general Ban Ki-moon.
"And we also need to do everything we can to get the Russian and Ukrainian governments to talk to each other about their future."
There was a similar message from Foreign Secretary William Hague after attending talks in Kiev with the beleaguered interim Ukrainian prime minister Arseniy Yatsenyuk.
"If Russia cannot be persuaded to respect the sovereignty and territorial integrity of Ukraine, there will have to be other consequences and other costs. I am not going to set out today what all of those are. We will act in a united way with other nations in the world," he said.
"Russia should be in no doubt about this. This is something that we take very seriously, that we have to take very seriously, because if this becomes the normal way of behaving in the world, of intruding upon and violating the sovereignty of neighbours, then clearly that would be an even bigger crisis in international affairs."
The Foreign Secretary, who described the situation following the deployment of thousands of Russian troops into the Crimean peninsula as "the biggest crisis in Europe in the 21st century", expressed concern at the potential for further escalation.
"Clearly we are very concerned about any possibility of a further move by Russia in other parts of Ukraine," he said.
"There are Ukrainian forces as well as Russian forces in Ukraine. There is a constant risk of miscalculation, of a flashpoint arising there (the Crimea) or in other parts of Ukraine."
The Foreign Secretary will update MPs on the situation in a Commons statement tomorrow.
Speaking at a joint press conference with Mr Hague, Mr Yatsenyuk denounced the Russian incursion as "illegal" and called on Moscow to withdraw its forces. He insisted the new administration in Kiev represented no threat to Russian nationals in the country.
"It is crystal clear that Russia invaded Ukrainian territory with no reason at all. We will protect the rights of minorities," he said.
"Every Russian citizen is under the protection of the state of Ukraine. There wasn't anybody who was killed or shot or injured in Crimea except Ukrainian soldiers."
However Russian Foreign Minister Sergey Lavrov insisted Russian troops needed to defend ethnic Russians - who account for almost 60% of the population of Crimea - until " the normalisation of the political situation" in Ukraine.
"We are talking here about protection of our citizens and compatriots, about protection of the most fundamental of the human rights - the right to live and nothing more," he said.
Mr Lavrov, who was speaking at the opening a United Nations Human Rights Council session in Geneva, dismissed criticisms of the Russian action claiming Moscow had received information relating to " preparations for new provocations" including against the Russian Black Sea fleet which is based in Crimea.
"Those who are trying to interpret the situation as a sort of aggression and threatening us with sanctions and boycotts, these are the same partners who have been consistently and vigorously encouraging the political powers close to them to declare ultimatums and renounce dialogue,"Mr Lavrov said.
"We call upon them to show a responsibility and to set aside geopolitical calculations and put the interests of the Ukrainian people above all."
It was announced in Brussels that EU leaders will hold an emergency summit on Thursday to discuss the situation in Ukraine.
A photograph of a document being carried in to Downing Street appeared to reveal elements of Britain's stance - including initial opposition to trade sanctions.
The text of the paper - reported to have been snapped as it was carried into Number 10 by a senior official - referred to support for visa restrictions and travel bans on key figures.
But it also stated: " UK should not support, for now, trade sanctions...or close London's financial centre to Russians".
It confirms the desire to "discourage any discussion (eg at Nato) of contingency military preparations" and notes EU work on how to provide Ukraine with gas should Moscow halt supplies.
The document is believed to have been in the hands of deputy national security adviser Hugh Powell when it was snapped by freelance photographer Steve Back.
It is the latest in a string of similar incidents of politicians and officials failing to properly conceal secret papers while walking to the door of Number 10.
It was seen as evidence of a desire by the Government to protect the UK economy from the financial effects of any sanctions imposed on Moscow.
Downing Street declined to comment on the leaked document but insisted that decisions on what actions should be taken would be taken with international partners.
"The Prime Minister is clear that continuing to violate Ukraine's sovereignty will have costs and consequences," a spokeswoman said.
"We will take decisions on what these are in close collaboration with EU and G7 partners."
They would consider "the range of diplomatic, political and economic measures".
Nato allies will meet tomorrow for emergency talks, it announced.
Poland sought the gathering under a provision which allows for consultations when any member state feel their "territorial integrity, political independence or security is threatened".
"The developments in and around Ukraine are seen to constitute a threat to neighbouring Allied countries and having direct and serious implications for the security and stability of the Euro-Atlantic area," Nato said in a statement.
As the UN Security Council met again to discuss the crisis, Mr Cameron spoke by telephone separately with both German chancellor Angela Merkel and French president Francois Hollande.
Downing Street said the trio had " agreed that the international community should speak with one voice and send a clear message to Russia that its actions in Ukraine were completely unacceptable.
"They agreed they must continue to work very closely together in response to events in Ukraine including in preparation for the special European Council which has been called on Thursday," a spokeswoman said.
"It would be important to be clear about the costs and consequences for the Russian government of continuing to violate Ukraine's sovereignty; and of supporting the people and government of Ukraine in support of their efforts to build an inclusive government and tackle economic challenges.
"They agreed there could be an important role for the United Nations, and potentially other international organisations, in facilitating the dialogue between the Russian and Ukrainian authorities which is central to the shared objective of de-escalating tensions in the region."
In New York, Russia's UN envoy claimed that ousted Ukrainian President Viktor Yanukovich had asked Moscow to send in troops to " establish legitimacy, peace, law and order", reading from what he said was a letter from him.
Former US presidential candidate Senator John McCain said he was "disappointed" by the UK's position and said European countries were "ignoring the lessons of history".
Asked if it was right to avoid such sanctions, he said: "Of course not. I am not astonished, to be very frank with you. Disappointed but not astonished."
The present situation was "the result of five years of naive relations with Russia, not the beginning of it", he said.
"If the Europeans decide that the economic considerations are too important to impose severe sanctions on Vladimir Putin - which you get from the statement by Angela Merkel today - then they are ignoring the lessons of history," he added - comparing Mr Putin's actions with those of Hitler in 1938.