Europe "sleep-walked" into the current crisis in Ukraine, with member states "taken by surprise" by the unfolding conflict, the House of Lords EU committee has said.
Lord Tugendhat, chairman of the committee, said a lack of "robust analytical capacity" in both the UK and the EU effectively led to a "catastrophic misreading of the mood in the run-up to the crisis".
He raised concerns that the UK's expertise within the Foreign Office had "diminished significantly" and said the EU displayed a "worrying lack of political oversight" regarding the European Commission's trade negotiations with Ukraine in 2013.
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"Having said that, Russia misread the Ukrainian appetite for a trade agreement with the EU," said Tugendhat. "The combination led to the crisis we have today, which neither side saw coming."
The Lords report, which looked at the cause of the Ukraine conflict and its implications, stated that the EU needs "fundamentally to reassess" its relationship with Russia.
The committee said that the UK government had "not been as active or as visible as it could have been" in seeking to resolve the crisis.
A Foreign Office spokeswoman told the BBC that nobody could have predicted the scale of the "unjustifiable and illegal" Russian intervention in eastern Ukraine and that the blame lies "squarely with the pro-Russian separatists, backed by the Russian authorities".
She added: "If the Ukrainian people want a closer social, economic and political relationship with the EU, that is for the people of Ukraine to decide, not Russia."
Last night, renewed rocket fire in eastern Ukraine, including around the rebel-held city of Donetsk, further undermined the ceasefire agreed in Minsk last week. General Philip Breedlove, Nato's top commander, said the ceasefire now existed in name only.
Meanwhile, RAF jets were again forced to scramble to intercept a pair of Russian long-range bombers seen off the coast of Cornwall. It came as Defence Secretary Michael Fallon warned that Russia's President Vladimir Putin posed a "real and present danger" to Latvia, Lithuania and Estonia.
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