The United States is preparing to punish Russia by starving off its access to western credit if President Putin does not meet demands for peace in Ukraine, it has been reported.

The Times reports that senior US officials have drawn up proposals to further close off credit in the West for Russia if the country does not end fighting in Eastern Ukraine.

Mr Putin signed the Minsk agreement in February following 16 hours of talks with the Ukrainian President Petro Poroshenko, French President Francois Hollande and German Chancellor Angela Merkel.

The Minsk agreement involved committing to a number of steps including a ceasefire, withdrawal of all foreign militias from Ukraine, heavy weapons withdrawal and Ukrainian control of the border by the end of this year.

President Poroshenko has alleged that Mr Putin has violated this agreement and failed to fulfil promises to move towards ending fighting in the region.

Under current sanctions, Russian companies in the US can only borrow credit for a maximum of 30 days, contrary to typical lending periods which can last years for other nationals. However, The Times reports that sanctions could now be escalated so that Russian companies would only be able to borrow money for a maximum of 7 days. The reduced time frame would be expected to undermine the companies’ ability to do business as their financial security would be weakened significantly.

EU and US sanctions against Russia have included as targets Russian state banks, businesses, military and energy firms. The countries say that the sanctions will put pressure on Mr Putin to adhere to international agreements in relation to Ukraine.

According to the Bloomberg Billionaires Index, the 21 most affluent Russians lost a combined total of $61 billion dollars last year, as part of the sanctions.

In pictures: EU politicians banned from entering Russia by the Kremlin Show all 6 1 /6 In pictures: EU politicians banned from entering Russia by the Kremlin In pictures: EU politicians banned from entering Russia by the Kremlin Nick Clegg Nick Clegg appears on a confidential Russian 'stop list' handed to the EU's ambassador by the authorities in Moscow PA In pictures: EU politicians banned from entering Russia by the Kremlin Malcolm Rifkind A Conservative former Foreign Secretary, who has been strongly in favour of sanctions against Moscow since the Russian annexation of Crimea. He says he is 'rather proud' to be on the Kremlin’s blacklist Getty In pictures: EU politicians banned from entering Russia by the Kremlin Daniel Cohn Bendit The former German Green Party MEP and leader of the French 1968 student protest movement has strongly criticised Russia’s actions in Ukraine. He has suggested a boycott of the 2018 World Cup, which is to be hosted by Russia AFP/Getty In pictures: EU politicians banned from entering Russia by the Kremlin Edward Mcmillan Scott A leading German conservative MP who earlier this year called Russia a 'warmonger'. He was due to discuss the Ukraine with Russian officials but was refused entry at Moscow airport last week. He said he suspected he was on a list of EU 'undesirables' In pictures: EU politicians banned from entering Russia by the Kremlin Karel Schwarzenberg A former Czech Foreign Minister. He said: 'When I saw the other names on the list, I found out I was in a very decent club' AFP/Getty In pictures: EU politicians banned from entering Russia by the Kremlin Bernard-Henri Levy French philosopher who backed Ukraine’s anti-Russian protest movement and has staged a play in Kiev criticising Moscow. He has said: 'Most people are disgusted by Putin’s mischief' AFP/Getty

Speaking this week whilst on a diplomatic visit to the UK, Ukrainian Prime Minister Arseniy Yatsenyuk said that he feels Russia is trying “to eliminate Ukraine.”