UK Chancellor Rachel Reeves will announce plans to use frozen Russian assets to fund a "reparations loan" that could provide billions of pounds for Ukraine's war effort, UNN reports with reference to The Independent.
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Reeves is expected to make the announcement at a meeting with her European counterparts in Copenhagen on Saturday, stating that it is "right to explore all options to support Ukraine."
This comes after European Commission President Ursula von der Leyen last week proposed providing Ukraine with a loan backed by "cash residuals" linked to Russian assets frozen by the EU.
She did not provide details on how this would work, but the move would allow the EU to use Russian assets to fund Ukraine without immediately confiscating them, which several countries believe would violate international law.
UK Treasury officials also declined to discuss the mechanisms the UK would consider, but said they would be developed in conjunction with the EU and would comply with international law.
Chancellor Reeves said: "While Russia does not respect international law, the UK does. We will only consider options that are consistent with international law and are economically and fiscally responsible."
In March, the UK announced it would provide Ukraine with a £2.26 billion (€2.59 billion) loan based on profits generated from frozen Russian assets.
But the British government has been urged to go further, with Liberal Democrats calling on ministers to fully confiscate the assets and use them to support Ukraine.
The UK Treasury said a "reparations loan" could make billions of pounds available to Ukraine without touching the underlying assets.
Reeves said: "This is Russia's war, and Russia must pay. It is right to explore all options to support Ukraine."
"Defending against Russian aggression is vital not only for Ukraine's long-term security and prosperity, but also for the UK and the whole of Europe," Reeves noted.
Since the start of the war, the UK has reportedly allocated up to £21.8 billion (€25 billion) to Ukraine, slightly less than the £25 billion (€28.7 billion) in Russian assets that the British government has frozen.