The European Union is considering sanctions against Russia as punishment for refusing to withdraw its troops from Georgia and for recognising the two breakaway enclaves of South Ossetia and Abkhazia.

The first hint that the EU might impose sanctions was made by Bernard Kouchner, the French Foreign Minister, during a press conference ahead of the planned summit on Georgia on Monday.

However, although the EU under the presidency of France wants to take a tough position against Russia’s continuing failure to meet the terms of the six-point peace plan on Georgia, brokered by President Sarkozy, the issue of sanctions is likely to provoke divisions in Europe.

Some EU officials were surprised that Mr Kouchner had raised the subject in public, knowing that it was going to be difficult to reach any form of consensus.

While some EU members are thought to be pushing for sanctions, it is a fact that the partnership and co-operation arrangements between the Europeans and Russia are of mutual benefit and both sides will be punished if sanctions are approved by the summit leaders.

One area being studied is the EU/Russia partnership and co-operation agreement which is currently being revamped in negotiations that began in July.

Some member states are urging for these negotiations to be suspended. The agreement covers economic and justice issues, external security, research and education and cultural aspects. Possible sanctions could also lead to restrictions on Russian travel visas to Europe.

However, the biggest obstacle to consensus over sanctions is energy. The EU is heavily dependent on Russia for oil and gas supplies, and, equally, Moscow is reliant on the EU for generating revenue from exporting energy to Europe.

Chancellor Angela Merkel of Germany is unlikely to agree to any sanctions that might cause lasting damage to relations with Moscow and interrupt the flow of gas and oil to Europe.

Despite the obvious difficulties of imposing sanctions, Mr Kouchner made it clear that they were on the agenda for the summit on Monday, although he did not indicate that France itself was proposing such action. “Sanctions are being considered and many other means as well....Certain countries have asked that sanctions be imposed,” he said.

His comments were dismissed by Sergei Lavrov, the Russian Foreign Minister, who said they were the product of “a sick imagination”.

“I think it is a demonstration of complete confusion,” he said during a visit to Tajikistan.

Mr Kouchner, however, said: “We are trying to elaborate a strong text [for the EU summit] that will show our determination not to accept [what is happening in Georgia].”

The EU, like Nato, does not want to sever relations with Russia and is keen to keep open the lines of communication with Moscow.

Meanwhile, the public rhetoric was continuing to undermine the efforts being made behind the scenes to repair the diplomatic damage caused by Russia’s military action in Georgia. Moscow insisted that Nato was engaged in a naval build-up in the Black Sea which Russian military officials claimed was in breach of the Montreux Convention under which there are supposed to be limits on the number and type of warship allowed in the Black Sea.

Nato denied that it was involved in any form of naval build-up. In a statement, the alliance said there were five warships currently in the Black Sea but that they were there on a long-planned and routine exercise. Notification for the warships’ transit through the Turkish Straits was given in June, well before the current crisis in Georgia, Nato said.

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