EU Foreign ministers have given President Mugabe one week to allow independent observers into the country for the March elections, or sanctions will be imposed.

The decision follows an interview with the Guardian newspaper, in which foreign secretary Jack Straw said that the time had come to "put Mugabe on the spot".

"The tragedy unfolding in Zimbabwe is driven by one man's ruthless campaign to hang on to power whatever the cost to others in the process. He's destroying his country's economy, damaging the rest of southern Africa and making wretched the lives of people," Straw said.

The country could also be excluded from the Commonwealth, following a meeting of the ministerial action group this Wednesday, the minister said.

"He [Mugabe] will say that it's all down to Britain being revanchist, the former colonial power manipulating the world media, but the pressure is already having an effect on the politics there leading to the very early stages of public arguments by people inside Zanu-PF," he continued.

Speaking on Sunday, Downing Street gave the foreign secretary its backing. "We believe it is time to focus President Mugabe's mind more sharply on the consequences of his repression," a spokesman said.

The shadow foreign secretary, Michael Ancram, welcomed the reports, but warned that the threats needed to be "genuine and timetabled".

"If at last Jack Straw has steeled himself to take action that should have been taken months ago, we welcome it. However these threats must be genuine and timetabled to ensure, even at this late stage, that the elections in Zimbabwe are as free and fair as possible," he said.

Michael Moore, Liberal Democrat foreign affairs spokesman, also backed the move. "Mugabe has made fools of the international community for long enough. Words of condemnation and talk of appropriate responses must now give way to concerted action," he said.

"The Zimbabwean government must be in no doubt about the minimum standards necessary for the looming presidential elections, and the regime which will follow."