Russian troops near the Ukrainian border will return to its permanent bases after completing its military exercises, Russia's Foreign Minister Sergei Lavrov has said, calling for a "de-escalation" of rhetoric.
The Russian government has accused Nato of adopting a 'Cold War' stance by suspending all co-operation with Moscow.
Nato made the decision yesterday and has also begun drawing up plans to give extra support to its European partners.
An unusually frank Nato Secretary General issued an unequivocal warning on the course of events should Russia attack Latvia or Estonia.
The West responds with sanctions and closer political ties with Ukraine as Russia's President seals the annexing of Crimea to much fanfare.
Supporters of the controversial fracking industry believe shale gas could be America's most potent weapon in the stand-off with Russia.