Russia must respect Ukraine's sovereignty, David Cameron said, warning Moscow "the world will be watching".
The Prime Minister issued the warning as the Kremlin scrambled fighter jets to patrol its border with the troubled country and reportedly gave shelter to its fugitive ousted president.
He said he was particularly concerned about the situation in the Crimea region, where pro-Russia gunmen took control of the regional parliament and administrative headquarters.
The latest challenges to attempts to set up a new national government in the capital Kiev were discussed by Mr Cameron and German chancellor Angela Merkel at talks in 10 Downing Street.
"We both support a united and a democratic Ukraine and we support the aspirations of the Ukrainian people to live in a truly democratic society, under the rule of law, free from corruption and intimidation," he said as they appeared together for a press conference.
"Every country should respect the territorial integrity and sovereignty of the Ukraine. Russia has made that commitment and it is important that Russia keeps its word.
"The world will be watching."
He went on: "This is not a zero-sum game, If the people of Ukraine want closer ties with Europe - greater trade, greater contacts - then of course we welcome that.
"But it is not about forcing the Ukrainian people to choose between Russia and Europe.
"It is in all our interests to have a stable and prosperous Ukraine that has strong relations with its neighbours and that is what we should all, including Russia, work to achieve."
President Viktor Yanukovych was forced out by a three-month protest movement sparked by his decision to withdraw from a deal with the EU in favour of closer links with Russia.
He is reported to be staying at a Kremlin sanatorium just outside Moscow.
Fears of an armed intervention by Russia are running high, not least as its Black Sea Fleet is based in Sevastopol and it has launched a large-scale military exercise.
Mrs Merkel said: "The Ukrainian Parliament today with a large majority voted Arseniy Yatsenyuk to be the new prime minister. I have great respect.
"We wish him not only the necessary strength for his task (but) I think I can say for both of us that we will do everything we can in order to support this government that has a tremendously difficult economic situation.
"We are also pinning our hopes on co-operation of the IMF and we hope that Russia will also support co-operation with the IMF."
She added: "The issue of the territorial integrity of Ukraine is of central importance to us. In my talks with the Russian president, however, I would like to say that I have seen that Russia is of the same view as we are in this matter. This territorial integrity needs to be preserved.
"The Ukrainian Government needs to resume its work and all of Ukraine must see itself reflected in the work of this Government," she said - adding that it was especially important that Ukraine's Russian population " find themselves reflected in the work of this government".
"This will be of tremendous importance for the future of Ukraine."