Germany shelves Nord Stream 2 after Putin sends troops to Ukraine

Russian tanks entered Ukraine on Tuesday after Vladimir Putin declared two Moscow-backed breakaway regions independent, prompting Germany to shelve its Nord Stream 2 gas link from Russia.

Putin said his troops went into the Donetsk and Luhansk territories in Ukraine’s Donbas region to keep the peace – an explanation derided by western leaders.

The Russian president made the order after a speech in which he questioned the validity of Ukraine as a state and accused western powers of using Ukraine to undermine Russia.

Putin said Russia would hold Ukraine responsible for “ensuing bloodshed” as Moscow accused the government in Kyiv of mounting attacks on the rebel-held territories – claims rejected by western governments.

In a sign of how serious the west is taking Putin's actions, Germany was reported to have pulled the plug on the Nord Stream 2 gas pipeline from Russia. Chancellor Olaf Scholz said Germany would examine other ways to secure its energy needs because "the situation has fundamentally changed".

The pipeline, considered a crucial part of Germany's energy strategy, was completed in September but is not yet in operation. It was also important for Russia as a way to increase supplies of gas to Europe from its fields in the west of the country.

Members of the United Nations security council criticised Russia’s actions. Linda Thomas-Greenfield, the US ambassador to the UN, dismissed Putin’s justification as “nonsense” designed to create “a pretext for war”.

With 150,000 or more Russian troops massed at the Ukraine border, the US and its allies had been expecting Putin to make such a move. The UK said the deployment of Russian troops in Ukraine was in effect the invasion that had been feared for weeks.

Sajid Javid, a UK cabinet minister, told Sky News: “We are waking up to a very dark day in Europe and it’s clear from what we have already seen and found out today that the Russians, President Putin, has decided to attack the sovereignty of Ukraine and its territorial integrity.

“We can already tell that he has sent in tanks and troops. From that you can conclude that the invasion of Ukraine has begun.”

Markets were buffeted by the escalation in the crisis. The FTSE 100 index fell 1% in early trading and was down 0.6% at 7,443.28 at 10:00 GMT. The Brent oil price rose 1.7% to reach $98.98 a barrel – the highest price since the start of the pandemic.

Ukraine said two of its soldiers were killed by shelling overnight and that 12 were injured. Russia has accused Ukraine of intensifying shelling of Donetsk and Luhansk – claims rejected by Ukraine and the west.

US President Joe Biden’s immediate response to Putin’s aggression was to ban investment and trade with the breakaway territories. The White House is expected to announce further sanctions on Tuesday along with the EU and the UK.

Western powers are reluctant to become directly entangled in Ukraine, which is not a member of Nato. Javid said the UK had ruled out sending troops to support the Ukraine government but that Britain would supply equipment and arms.

He said Britain was prepared to impose sanctions on Russian individuals and companies to apply pressure to Moscow. The UK is rich Russians’ favourite jurisdiction for storing money and raising capital.

Russia’s ambassador to the UN, Vasiliy Nebenzya said: “We remain open to diplomacy. However, allowing a new bloodbath in the Donbas is something we do not intend to do.”