The Prime Minister has been given a top-secret briefing after a Russian nuclear submarine was identified off the coast of Scotland.
It comes as President Vladimir Putin vowed to "punish" the West for giving Ukraine long-term missiles and a £40billion loan using frozen Russian assets.
Kazan, a state-of the art Yasen-class submarine, was detected on June 5 after an RAF Poseidon P8 anti-submarine aircraft dropped sonar buoys used to detect subsurface activity at depth.
An RAF maritime surveillance plane tracked the sub as it headed up the west coast of Ireland to Scotland, passing close to Britain's nuclear naval base at Faslane. Military commanders feared the loitering 13,800-tonne vessel was probing for weaknesses on NATO's extreme flank.
News of the Russian vessel's location was passed to the Permanent Joint Headquarters in Northwood, with both the Prime Minister and Defence Secretary informed.
Kazan was expected to go to Venezuela before landing in Commonwealth nation Guyana where Royal Navy patrol ship HMS Trent was recently deployed as a show of support against increasing border belligerence by Russia-supporting Venezuela.
The Russian president has reacted with fury at the provision of American Army Tactical Missile System (ATACMS) rockets to Ukraine and a loan.
In a briefing last week, Julianne Smith, the US NATO Ambassador, said Washington DC may review its policy of not allowing the ATACMS to target mainland Russia, adding: "We will continue to assess and adapt to Ukraine's ever-evolving needs."
On Friday members of the G7 agreed to the £40billion loan, to be financed by interest accruing from frozen Russian assets in the West.
Around £240billion in assets from Russia's central bank was frozen as part of Western sanctions shortly after the 2022 Russian invasion of Ukraine.
Sources say the deal was struck so Ukraine could be assured of enough funds in the event the US Congress once again held up aid under a Donald Trump presidency.
US President Joe Biden also signed a 10-year security pact with Ukraine leader Volodymyr Zelensky.
Justin Crump, from Sibylline strategic risk group, said: "It is important to note that it isn't Russian funds, but rather the interest accrued from them, which will guarantee the £40billion loan to Ukraine."
"The UK's position is that all the money belongs to Russia and, as such, cannot be touched.
"However, it may prove useful leverage when it comes to peace talks," he said.
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