Ukraine's coup-installed regime signed an "association agreement" with the European Union in Brussels , while Vladimir Putin signed off on Crimea's incorporation into Russia.

The Russian president hailed a "remarkable event" and ordered fireworks in Moscow and Sevastopol, while Ukraine's interim premier Arseniy Yatsenyuk praised a "historic day" which would lead to "full-fledged membership" of the neoliberal EU bloc in the future.

Mr Yatsenyuk has so far only signed a political association agreement with the EU, but economic clauses designed to "integrate" it with the rest of the bloc are due to follow in May.

He called for "real economic leverage" to "contain" Russia in a garbled speech claiming that Russia had "revised the results of the second world war," though Crimea was not transferred to Ukraine from Russia until 1954.

The EU indicated it would seek to extend similar agreements to Georgia and Moldova, a further encirclement bound to infuriate Russia.

But President Putin appeared unconcerned by EU and US sanctions targeting senior Russian figures, saying he saw "no need to retaliate."

He indicated that he had no intention of closing transit corridors through Russian territory the US occupying army in Afghanistan plans to use for its withdrawal from the country later this year - a clear reminder to the West of the negative consequences of starting a new cold war.

And Foreign Minister Sergey Lavrov said Russia would "welcome" Organisation for Security and Co-operation in Europe monitors to eastern Ukraine, a proposal Western powers had expected it to resist.

At the same time Prime Minister Dmitri Medvedev raised the heat on Kiev by saying Russia would reclaim $11 billion (£6.7bn) in gas rebates offered in exchange for extending the lease on its Crimean naval base, which he said was void since Crimea was now part of Russia. Mr Putin added that he expected the repayment of a $3bn (£1.8bn) loan granted to the Yanokovych government before its overthrow.

EU powers sent mixed messages on Russia, with France offering to send military aircraft to patrol over the Baltic states and Poland but also confirming it would not cancel a deal to sell two warships to Moscow.