Britain stokes up the diplomatic war over Chechnya

As Russian shells pounded Grozny, the Chechen capital, Western countries warned of economic measures and diplomatic retaliation against Moscow, which could include a recall of ambassadors and cancellation of a G8 foreign ministers' meeting next week.

As Russian shells pounded Grozny, the Chechen capital, Western countries warned of economic measures and diplomatic retaliation against Moscow, which could include a recall of ambassadors and cancellation of a G8 foreign ministers' meeting next week.

A British official said a range of possible sanctions would be presented at tomorrow's European Union summit in Helsinki. The leaders will also consider withholding food aid and suspending science and technological programmes.

But while pressure from European countries for tougher condemnation of Russia's aggression mounted, President Bill Clinton ruled out any suspension of aid by Washington last night because it would not be in United States interests. Two-thirds of US assistance, he said, went on helping Russia secure potentially dangerous nuclear facilities, the other third to help promote democracy.

However, he left open the possibility that the US might block financial assistance through the International Monetary Fund, noting that the IMF judged that Russia had not fully met the economic conditions for the loans.

The latest Chechen town to fall, according to both sides, was the stronghold of Urus-Martan, south-west of the capital. The Russians claimed to have taken the town where resistance had previously been strong and killed 80 rebels. The latter said they had abandoned Urus-Martan of their own accord to regroup.

Barring a Russian change of heart, a meeting next Thursday of G8 foreign ministers, representing Russia and the major Western countries, might also be scrapped. "Unless Moscow agrees to put Chechnya top of the agenda, there may well not be a meeting," the British official said.

As outrage continued over Monday's "leave-or-die" ultimatum to inhabitants of Grozny, Germany - Russia's largest international creditor - said no international loans would be released to Moscow while the offensive lasted. However, the impact of the West's anger was unclear. Robin Cook, the Foreign Secretary, said last night that the criticism "had obviously been heard and understood" in Moscow, and had forced the generals to dilute the original ultimatum to the estimated 40,000 people left in Grozny that if they did not leave the city by Saturday they faced annihilation.

But the Russian President, Boris Yeltsin, demonstrated his disdain for his critics in the West by defying doctors' advice and starting a visit today to China, the sole permanent member of the Security Council to support his generals' war. He has also signed a scheme for a union with Belarus, another of Russia's few allies over Chechnya.

And, although his military now says the ultimatum was directed exclusively at the insurgents, senior Russian diplomats declared that there would be no surrender to outside pressure.