Speaking to foreign ministry officials, the Kremlin leader said: 'Calls to inflict a strategic defeat on Russia, which possesses the largest arsenal of nuclear weapons demonstrate the extreme recklessness of Western politicians.

'They either do not understand the scale of the threat they are creating – or are simply obsessed with their own sense of impunity and exceptionalism.

'Both can lead to tragedy.'

Putin also warned that plans by Western countries to provide Ukraine with loans using interest from Russian assets frozen abroad was theft and would not go unpunished.

'Despite all the chicanery, theft will certainly remain theft. And it will not go unpunished,' he said.

'Now it is becoming obvious to all countries, companies (and) sovereign funds that their assets and reserves are far from safe in both the legal and economic sense of the word.

'Anyone could be next in line for expropriation by the US and the West.'

Putin was speaking a day after G7 leaders agreed on an outline deal to provide $50 billion of loans for Ukraine using interest from Russian sovereign assets.

He told officials the 'Western model' of global security is collapsing and 'needs to be essentially created anew' – adding he is open to talks with everyone, including NATO.

'All this requires us, together with our partners, with all interested countries, and there are many of them, to work out our own options for ensuring security in Eurasia, proposing them then for wider international discussion,' he said.

'We live on the same continent. No matter what happens, you cannot change the geography. We will have to coexist and work together one way or another.'

Putin also set out his prerequisites for peace talks with Ukraine.