London: Russian actions in Ukraine are undermining the security of nations in Eastern Europe, British foreign minister Philip Hammond is to warn in a speech on Tuesday.


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His remarks come as NATO prepares for a major exercise in the Baltic states of Latvia, Lithuania and Estonia, where Russian involvement in an 11-month war in Ukraine has jangled nerves.


"We are now faced with a Russian leader bent not on joining the international rules-based system which keeps the peace between nations, but on subverting it," Hammond will tell the Royal United Services Institute (RUSI) in London, according to pre-released remarks.


"President Putin`s actions - illegally annexing Crimea and now using Russian troops to destabilise eastern Ukraine - fundamentally undermine the security of sovereign nations in Eastern Europe."


Moscow denies Western accusations that it backs the heavily armed separatist militias fighting against Kiev forces in eastern Ukraine.


Russian President Vladimir Putin has acknowledged ordering the annexation of Crimea from Ukraine, in a move that sparked international condemnation.


The conflict has killed over 6,000 people according to the United Nations, and a shaky truce was strained on Monday as Ukraine accused the separatists of firing on government positions.


Britain and other Western governments were accused by former British army head Peter Wall on Tuesday of being "caught napping" amid threats from Russia and extremists such as Islamic State.


Wall urged the government to meet a NATO defence spending target of 2 percent of GDP, and criticised cuts to defence spending he said were based on an assumption of a "reasonably benign security environment for this decade".


"We can now see those consequences playing out in our reticence to counter Russian expansionism, and her interference in our airspace and offshore waters," Wall wrote.


The comments follow a report by RUSI that said Britain`s defence spending would inevitably drop below the 2 percent target due to austerity measures.


The report predicted that the military`s strength could be reduced by 30,000 personnel, leaving just 115,000 in the combined armed forces by the end of the decade.


The government has said that it is committed to spending 2 percent of GDP on defence, and that regular armed forces should not be "reduced below the level that they are now".