Ministers are plotting new sanctions against Vladimir Putin and Kremlin-linked oligarchs after the Russian government expelled 23 British diplomats and launched an assault on its cultural ties with Britain.

A government source said “detailed conversations” were taking place over the “next steps” after the Kremlin’s “disgraceful” order that the British Council’s offices in Russia, together with the UK’s St Petersburg consulate, should be shut down in the wake of Britain’s response to the poisoning of a former KGB spy and his daughter.

Ahead of a National Security Council meeting planned for early this week, Theresa May was facing calls to target “regime-linked money” in London.

Lord Macdonald of River Glaven, the former director of public prosecutions, said a “really aggressive financial strategy” against wealthy individuals associated with Mr Putin would be Britain’s most effective weapon.

The government source said: “There is collective agreement that we need to have a response that Putin will take seriously. The next steps will be considered and taken after detailed conversations. The Government won’t rush into any decision.”