Barack Obama accuses Vladimir Putin of trying to 'recreate the glories of the Soviet empire'

The US President has accused Vladimir Putin of deliberately ruining Russia’s economy to “recreate the glories of the Soviet empire”.

Barack Obama made the remarks at a conference during the G7 summit of nations, which was the G8 until Russia was suspended following the annexation of Crimea last year.

The Ukraine crisis has been a central focus for leaders from the UK, US, Canada, France, Germany, Italy and Japan.

The conflict and possible new sanctions against Russia reportedly took up two thirds of the discussion at a dinner on Sunday intended to cover all foreign policy.

Delegates expressed concern yesterday about continued battles between government troops and separatist rebels in the east of the country despite numerous rounds of failed peace talks and ceasefires.

Mr Obama claimed his Russian counterpart had to “make a decision” on what direction his country would continue in.

He continued: “Does he continue to wreck his country's economy and continue Russia's isolation in pursuit of a wrong-headed desire to recreate the glories of the Soviet empire, or does he recognise that Russia's greatness does not depend on violating the territorial integrity and sovereignty of other countries?”

The US President once again claimed Russian troops were fighting in Ukraine, an accusation Mr Putin has repeatedly denied.

“Russia's actions in Ukraine are hurting Russia and hurting the Russian people,” Mr Obama continued.

“And the G7 is making it clear that if necessary we stand ready to impose additional significant sanctions against Russia."

Mr Putin has not officially responded to the speech but Russian media outlets reacted on Tuesday morning.

Russia Today quoted a political commentator slamming “Cold War talk that is driven by the Americans” and claiming EU countries were being “forced to work against their own interests” by the US.

Sputnik, a news service owned by the Russian government, carried an article on the front page of its website saying President Obama had “lost total credibility”.

A spokesperson at the Kremlin played down Mr Putin’s absence from the summit and said he was concentrating on “work in other more effective formats” that better reflect the international situation.

"It's impossible now to get together in seven or eight people and effectively discuss global problems," RIA news agency quoted Dmitry Peskov as saying.

Canadian Prime Minister Stephen Harper and Japan's Shinzo Abe both visited Kiev before the G7 summit and voiced strong support for President Petro Poroshenko.

Angela Merkel, who was hosting the summit in Bavaria, has led diplomacy to engage Mr Putin in a diplomatic solution to the conflict, told reporters that sanctions against Russia could be lifted if Moscow and the separatists fully implemented the Minsk peace deal struck earlier this year.

Additional reporting by Reuters