The Government is talking tough on the Ukraine crisis, threatening to put a free trade deal on hold and ordering minister Tim Groser back from Russia.
Foreign Minister Murray McCully also hauled in Russian ambassador Valery Tereshchenko yesterday, after the super power deployed troops into the Crimean Peninsula.
The forceful stance comes as New Zealand ramps up its campaign for a non-permanent seat on the United Nations Security Council.
Key was considering a visit to Moscow later this month, sandwiched in between a trip to China and Netherlands for the Nuclear Security Summit. But the dates did not work for President Vladimir Putin.
Trade Minister Tim Groser has been in Moscow for negotiations on the pact, which has been three years in the works.
He was ordered to complete his meetings and return last night. Although the deal was "close" to being concluded, Mr Key said it was not the right time to sign "if there was one on the table today".
New Zealand's exports to Russia rose from $51 million in 2000 to $230.4m in 2012.
"We have made clear that we see Russia's actions in Ukraine to be unacceptable," Key said.
"What I am saying is that if the situation continues, or escalates further . . . that may have an impact of progress on the free trade agreement. When that will be signed, well that will be a matter for another day. We had been hoping to make progress quite quickly," he said.
"It's been three years of work. We'd like to see a deal signed but we also want to see how things unfold in Russia."
Asked if New Zealand would pull out of the pact, Key said: "That's a hypothetical . . . it's not one we would prefer to pursue."
Tereshchenko was called in by the Foreign Affairs Ministry yesterday. McCully said the Government was "deeply alarmed" and condemned the breach of Ukraine's sovereignty, urging Russia to move to reduce tensions.
Western powers are alarmed after Russia sent troops into the Crimean Peninsula at the weekend. The US and other powers are considering boycotting the G8 meeting at Sochi in June.
It's the biggest clash between the West and Moscow since the end of the Cold War. Ukraine gave up its nuclear weapons in the mid-1990s on condition of protection by the US, Britain and Russia.
The Security Council held closed door meetings at the weekend in response to the Russian aggression. The EU is among those considering sanctions.
New Zealand is vying for a seat on the council in 2015-16 and voting takes place in September.
The third Nuclear Summit, at The Hague later this month, is aimed at improving the security of nuclear materials and countering the threat of nuclear terrorism.
Key is among 53 world leaders due to attend, including US President Barack Obama and UN Secretary-General Ban Ki Moon. Key will hold bilateral talks on the sidelines.
On his way to Europe he will spend four days in China and Hong Kong. Key said he wants to assure Chinese consumers that the Government inquiry into August's whey contamination incident "delivered a strong endorsement of the New Zealand food safety system".
- Fairfax Media
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