The Government has threatened legal action against former Chelsea owner Roman Abramovich to release £2.5billion of funds from the sale of the club to help victims of the Ukraine war.

Chancellor Rachel Reeves and foreign secretary David Lammy said they were “frustrated” by the failure to reach agreement with Abramovich on the frozen proceeds of the sale.

The London club was sold in May 2022 after Abramovich was among the high-profile Russian oligarchs sanctioned following Vladimir Putin’s invasion of Ukraine.

The funds were frozen, with a plan for them to be used to alleviate the suffering caused by the war in Ukraine.

But an agreement has yet to be reached with Abramovich over the use of the money, which is held in a UK bank account.

The money cannot be moved without a licence from the Office of Financial Sanctions Implementation.

Reeves and Lammy said: “The Government is determined to see the proceeds from the sale of Chelsea Football Club reach humanitarian causes in Ukraine, following Russia’s illegal full-scale invasion.

“We are deeply frustrated that it has not been possible to reach agreement on this with Mr Abramovich so far.

“While the door for negotiations will remain open, we are fully prepared to pursue this through the courts if required, to ensure people suffering in Ukraine can benefit from these proceeds as soon as possible.”