President Vladimir Putin said on Wednesday that Russia could have sunk a British warship that it accused of illegally entering its territorial waters without starting World War Three and accused Washington of a role in the "provocation".
Tensions between Moscow and London soared last week after Russia challenged the right of HMS Defender to transit waters near Russian-annexed Crimea, something Britain said it had every right to do.
Putin's comments add menace to earlier Russian warnings that Moscow would bomb British naval vessels in the Black Sea in the event of further provocative actions by the British navy near heavily fortified Crimea.
Russia annexed Crimea from Ukraine in 2014 and Britain and most of the world recognise the Black Sea peninsula as part of Ukraine, not Russia.
In an account of last week's incident which London said it did not recognise, Russia said it had fired warning shots and dropped bombs in the path of the British warship which was en route from Ukraine to Georgia.
Putin, speaking during his annual question and answer session with voters, signalled his anger over what he called "a provocation" designed to reveal how Russian forces in Crimea reacted to such intrusions.
When asked if the world had stood on the precipice of World War Three during the standoff, Putin said: "Of course not."
"Even if we had sunk the ship it is hard to imagine that the world would have been on the verge of World War Three because those doing it (the provocation) know that they could not emerge as victors from such a war," he added.
Putin accused the United States and Britain of planning the episode together, saying a U.S. spy plane had taken off from Greece earlier on the same day to watch how Russia would respond to the British warship.
"It was obvious that the destroyer entered (the waters near Crimea) pursuing, first of all, military goals, trying to use the spy plane to see how our forces would stop such provocations, to see what is activated and where, how things work and where everything is located."
Putin said Russia had realised what the aim of the exercise was and had responded in a way that would only give the other side the information Moscow deemed necessary.
Putin said he saw a political element to the incident, which took place shortly after he had met U.S. President Joe Biden in Geneva.
"The meeting in Geneva had just happened, so why was this provocation needed, what was its goal? To underscore that those people (the Americans and British) do not respect Crimeans' choice to join the Russian Federation," he said.
The Russian leader accused London and Washington of a lack of gratitude, saying he had earlier this year given the order for Russian forces to pull back from near Ukraine's borders after their build-up had generated concern in the West.
"We did this," said Putin. "But instead of reacting positively to this and saying 'OK, we've understood your response to our grumbling' - instead of that, what did they do? They barged across our borders."