Russia retaliated against tough new Western sanctions yesterday, banning most food imports from the United States and the European Union and threatening to block flights over its airspace.

But the 28-member European Union swiftly denounced the measures as “clearly politically motivated" and said it was ready to take action in response.

The tit-for-tat moves further heighten tensions between Russia and the West over the conflict in Ukraine, where heavy shelling was reported in the rebel-held eastern city of Donetskyesterday.

Russia's food embargo would affect "imports of beef, pork, fruit and vegetable produce, poultry, fish, cheese, milk and dairy products from the European Union, United States, Australia, Canada and Norway,” Prime Minister Dmitry Medvedev told a government meeting in televised remarks.

The ban exempts only baby food and will last one year unless “our partners demonstrate a constructive approach" with regards to sanctioning Russia, he said.

Russia imports 35 percent of all the food it consumes, taking 10 percent of food industry exports from the European Union worth 12 billion euros a year.

In another potential strike against the West, Moscow is considering banning the use of Russian airspace for European airlines, the so-called overflight rights needed to take the shortest route between Europe and Asia.

"Russia is ready to review the rules of usingTranssiberian routes," Medvedev said. "Of course this is a severe measure. Nevertheless, we need to mention it, "he added.

US airlines have not been allowed to use Siberian airspace for years and have been pushing the Russian government to review its policy.

The developments came as Nato on Wednesday said Russia has amassed around 20,000 combat-ready troops on Ukraine's eastern border and could use the pretext of a humanitarian or peace-keeping mission to invade the country.

Stating the conflict in Ukraine was fueled by Russia, Nato said in a statement that the troop build-up had further escalated "a dangerous situation".