President Vladimir Putin delivered a robust defence of Russia’s actions in Crimea and said he would use force in Ukraine only as a last resort, easing market fears yesterday that East-West tension over the former Soviet republic could lead to war.

Ukraine’s prime minister has insisted that a bailout deal reached with Russia will guarantee financial stability in the troubled country.

US President George Bush warned tonight that the world “is watching very closely” as Ukraine tries to sort out a disputed presidential election.