Britain said on Monday it would impose sanctions on companies and people with the closest links to the Kremlin if Russia takes action against Ukraine, drawing a warning from Moscow that it would respond if its businesses were “attacked”.

Since the fall of the Soviet Union in 1991, London has become the pre-eminent global centre for a vast outflow of money from former Soviet republics.

Opponents of President Vladimir Putin, who has massed troops near Ukraine, have repeatedly called on the West to get tough, though oligarchs and Russian officials continue to flaunt their wealth at Europe’s most luxurious destinations.

“We are very clear that if Russia takes further action against the Ukraine, then we will further tighten the sanctions regime targeting those businesses and people with the closest links to the Kremlin,” Simon Clarke, chief secretary to the treasury, told Sky News.

Kremlin spokesman Dmitry Peskov said the threat of sanctions would amount to an attack on Russian businesses. He said such actions would backfire by hurting British companies and warned that Russia would respond.

The US, the EU and Britain have warned Putin against attacking Ukraine.

Russia denies planning to attack Ukraine and is demanding security guarantees including a promise by Nato never to let Kiev join the alliance.

Russian officials say the West is gripped by Russophobia and has no right to lecture Moscow on how to act after Nato’s eastward expansion since the Cold War ended.

The British government will introduce new legislation this week to broaden the scope of sanctions it can apply to Russia to try to deter aggression towards Ukraine, foreign secretary Liz Truss said on Sunday.

Britain has imposed sanctions on about 180 people and 48 entities since Russia annexed Crimea form Ukraine in 2014.