The UK national security adviser has said Europe must be ready to endure “real hardship” this winter if it is to keep up economic pressure on Russia.

In rare public remarks, Jonathan Powell told a conference in Kyiv that Europe’s strategy of supporting Ukraine and imposing sanctions on Moscow was working.

Powell said talk of Russian escalation was “not a problem” but a “sign of success” that pressure on President Vladimir Putin was finally paying off – and as such European nations should not take their “foot off the gas”.

His optimistic remarks come as Russia continues to target Ukrainian infrastructure and as Europe faces a severe energy shortage this winter after drastically reducing its dependence on Russian oil and gas.

Despite Russia’s full-scale invasion now being in its fifth year, Powell said Ukraine had “already won” because Putin would not be able to seize the whole country and “a free Ukraine in Europe” would be able to choose its own direction regardless of any territorial loss.

The prime minister’s most senior security adviser was in Ukraine’s capital only last weekend for talks with US President Donald Trump’s envoys after they visited Putin in Moscow.

His remarks at the Yalta European Strategy forum – to an audience of Ukraine’s top leadership and international supporters – provided an unusual and detailed insight into UK policy on the war, and were distinctly positive compared to those of others.

Round the clock Russian attacks on Ukraine are damaging the country’s economy, weakening morale and raising fears about the coming winter when power shortages are expected.

Oleksandr Kravchenko, Ukraine’s minister of economy, told the conference that Russian attacks this year were expected to cost $10bn (£7.4bn) in destroyed infrastructure and assets. With the blockade of Ukraine’s sea ports curbing grain exports, he said Ukraine’s GDP would contract by 1.5%.

Europe is now preparing for winter amid a global energy crisis and with low stockpiles of gas, making sanctioned Russian supplies of liquid natural gas potentially more attractive to some EU countries.

Sanctions have meant Europe has massively reduced its consumption of Russian gas – but not entirely, with some countries dragging their feet.

The EU still gets 12% of its gas imports from Russia but plans a complete phase-out by January. However, last week the European Court of Auditors said this plan was “faltering” amid gas shortages due to the Iran war.

Powell said “we cannot turn that into an advantage for Putin”, adding that pressure on Putin was working “and that means we have to keep the pressure up”.

“It will require some real hardship and difficulties on our parts,” he added. “But we will have to swallow that and we have to keep the economic, military, political and diplomatic support going for Ukraine.”

While admitting that things in Ukraine did “feel a bit difficult at the moment”, with a lack of Patriot air defence missiles, strikes on businesses and the governments budget deficit, Powell insisted “there are strong reasons for optimism”.

He said Trump – who has blown hot and cold on Ukraine – was “in a very different place”.

“He sees that Ukraine is doing better and therefore he is not leaning in the direction of Putin in the way that he was previously. I think that’s a really big asset.”

Powell said Russia was no longer claiming the US had agreed that Ukraine should give up territory and hopes of Nato membership at last year’s Trump-Putin summit in Alaska.

“The so-called Anchorage compromise is firmly dead,” he said. “We can stop worrying about it. It’s finished.”

This meant “we can look for serious ways of getting to a negotiated settlement, rather than waiting for the Ukrainian people to hand over territory the Russians have not been able to conquer”, Powell said.

Ukrainian commanders had successfully held the front line on the ground while Russia had reached 1.5 million casualties, Ukraine had increasingly struck deep within Russian territory while Europe’s resolve remained solid, he noted.

“The strategy is to apply enough pressure to make [Putin] want to get into negotiation,” Powell said.

“And I think that the escalation we hear talk about is not a problem – it’s a sign of success, because what’s happening is the pressure that we are putting on Putin is finally paying off.”

Putin himself has given little sign he is feeling under pressure, telling journalists earlier this month: “I have no doubt that the enemy will crumble.”

Meanwhile, Ukrainian authorities have begun evacuating some residents in Slovyansk and Kramatorsk, the biggest cities still under full Ukrainian control in the eastern Donbas region. Russia claims sovereignty over the Donbas and fully capturing it is a key objective for Moscow.

Powell said the war was “not about territory” but about “the right of Ukraine to be independent”, adding that “to the extent that [Putin] gains another 10km of land or loses another 40km of land, this war is already won”.

“That’s the threat to him at home. There is a free, independent and European Ukraine, and people in Russia are going to notice that.”

The national security adviser said it was a “mug’s game” to predict when the war might end, but said Europe had to be prepared to negotiate a settlement.

“Where we least expect it, Putin will be ready to negotiate… It’s all about getting him to be serious in that negotiation. And I think that strategy is beginning to work.”

Powell, who helped negotiate the Good Friday Agreement in Northern Ireland, said the US and Europe should maintain contact with Putin – despite describing the Russian leader as a “terrorist”.

“What we don’t want is miscalculation – that they don’t understand where our red lines are. That’s why I think it’s important the CIA went to Moscow as well.”

“I wrote a book called “Talking to Terrorists”. I would certainly be in favour of talking to this terrorist as well – to try and maintain communication.”