Europe and the UK face a fresh immigration crisis unless $300bn (£244bn) of frozen Russian assets are seized and handed to Ukraine, the financier Sir Bill Browder has warned. 

Speaking on the fringes of the World Economic Forum meeting in Davos, Switzerland, Sir Bill said that the funds would allow Ukraine to defend itself for a further three or four years without having to rely on any additional Western military aid.

Donald Trump has made ending the war in Ukraine a top priority, but fears are growing of a shabby compromise that would force Ukraine to cede territory and fail to satisfy European security concerns.

Sir Bill, who founded the hedge fund Hermitage Capital Management, said Ukrainian capitulation would prompt a mass exodus of refugees and encourage Vladimir Putin into further aggression in the Baltic states and beyond.

It would also force European nations into dramatic increases in defence spending at a time of growing pressure on government budgets.

He said: “The main leverage that Donald Trump has in forcing a settlement on Ukraine is the idea that he can dictate terms by withdrawing US funding for the war.

“The crux of the matter is that there’s no reason why Trump should have all this leverage when there’s $300bn Russian Central Bank reserves sitting in western central banks, most of which is in the UK and Europe.

“That money should be quickly confiscated and handed to Ukraine, so that it’s not Donald Trump determining their future. If forced into a total capitulation, we are going to end up in Western Europe, in the UK, with 15-20m refugees.

“And we’re also going to end up in a situation where Putin will then make a move on Estonia.”