Ukrainian armed forces in the Donetsk region. | Reuters (Anna Kudriavtseva)

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Russia will face severe economic sanctions if it instals a puppet regime in Ukraine, a senior UK minister said on Sunday after Britain accused the Kremlin of seeking to instal a pro-Russian leader there.

Britain made the accusation late on Saturday, also saying Russian intelligence officers had been in contact with a number of former Ukrainian politicians as part of plans for an invasion.

The Russian Foreign Ministry dismissed the comments as "disinformation", accusing Britain and NATO of "escalating tensions" over Ukraine.

"There'll be very serious consequences if Russia takes this move to try and invade but also instal a puppet regime," Deputy Prime Minister Dominic Raab told Sky News on Sunday.

The British accusations, first made in a statement late on Saturday by the foreign ministry, come at a time of high tensions between Russia and the West over Russia's massing of troops near its border with Ukraine. Moscow has insisted it has no plans to invade.

The foreign ministry said it had information the Russian government was considering Yevhen Murayev as a potential candidate to head a pro-Russian leadership.

Murayev, 45, is a pro-Russian politician who opposes Ukraine's integration with the West. According to a poll by the Razumkov’s Centre think tank conducted in December 2021, he was ranked seventh among candidates for the 2024 presidential election with 6.3% support.

Murayev poured cold water on Britain's claims that Russia wants to instal him as Ukraine's leader, in comments to The Observer. In a Facebook post later on Sunday, he called for an end to dividing Ukraine into pro-Western and pro-Russian politicians.

"The time of pro-Western and pro-Russian politicians in Ukraine is gone forever. Ukraine needs new politicians whose policy will be based solely on the principles of the national interests of Ukraine and the Ukrainian people."

The British foreign ministry declined to provide evidence to back its accusations. A ministry source said it was not usual practice to share intelligence matters, and the details had only been declassified after careful consideration to deter Russian aggression.

"We will not tolerate Kremlin plot to instal pro-Russian leadership in Ukraine," Foreign Secretary Liz Truss said on Twitter.