Foreign Secretary Boris Johnson's call for targeted sanctions against senior Russian and Syrian figures has been rejected by fellow G7 foreign ministers.
At a meeting at Lucca in Italy, the group said there must be an investigation into last week's chemical weapons incident in a rebel-held town before new measures could be adopted, according to a UK Government source.
The source insisted the option of sanctions remained on the table, but the outcome will come as a disappointment to the Government, which had hoped to strengthen the hand of US Secretary of State Rex Tillerson as he prepares to confront the Russians over their support for Syria.
The Government had hoped that by targeting sanctions against military figures, they would overcome German and Italian objections to the adoption of wider measures against Russia and Syria.
Earlier, Theresa May and US President Donald Trump agreed in a telephone call that there was a "window of opportunity" to persuade Russian President Vladimir Putin to abandon his Syrian ally when Mr Tillerson travels to Moscow.
Italian foreign minister Angelino Alfano said the summit had been "a political success" and leaders would use a "window of opportunity" created by last week's US missile strike against the regime to revitalise political talks.
He said: "There was a prevalent position, which is very similar to the Italian one. We must have a dialogue with Russia and we must not push Russia into a corner.
"We must also ask Putin to demand the credit that has been up to now granted to Assad and in fact we think that the Russian's have the strength that is needed to put pressure on Assad and to get him to observe the commitments with regard to the ceasefire."
