British-made drones will be used to build a "drone wall" to protect Nato from Vladimir Putin's Russian aggression.
The low-cost unmanned craft will be developed in collaboration with Ukraine and is part of a new strategy to deter Mr Putin's jets and drones on Nato's eastern flank.
European ministers have raised concerns about Russia breaching the airspace of both Poland and Estonia, which prompted the UK to deploy RAF Typhoons over Poland.
A suspected Russian "hybrid" incursion of drones also unfolded this week in Denmark and Norway.
Defence Secretary John Healey told The Telegraph that the "reckless" and "dangerous" manoeuvres by Moscow would be answered back by Nato countries, including new border defences.
Codenamed Project Octopus, the UK has launched a drone-building programme with Ukraine, which will see interceptor drones built in British factories within weeks and deployed to prevent Russian aggression.
European ministers met on Friday to discuss the "drone wall" concept, which would involve stationing ground-launched drones on the border to tackle Russian drones or missiles.
Over the weekend, Russia launched over 500 drones and 40 missiles into Ukraine, killing at least four people.
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The UK plans to produce 'thousands' of drones 'to help Ukraine defend themselves'
| PAThe UK and Ukraine will jointly own the drones' intellectual property, which will also allow them to be deployed in Nato countries.
Mr Healey said the drone wall has already proved effective against Iranian-made Shahed suicide drones, but has a production cost of less than a tenth of their rivals.
He said: "We're ready with allies through Nato to demonstrate to Putin that his aggression and his incursions, reckless or intentional, will be challenged."
Mr Healey added that the system could eventually be used as a missile defence system in the UK.
The move comes as fresh sightings of drones were reported over Denmark's largest military base.
The Danish defence ministry said the drones were "observed at several Danish defence facilities".
Troels Lund Poulsen, Denmark's Deputy Prime Minister, said at the time that the drones were likely launched by a "professional actor" but opted out of accusing Russia of being involved.
Denmark's Prime Minister, Mette Frederiksen, said: "There is one main country that poses a threat to Europe's security, and it is Russia."
Defence Secretary John Healey said: 'We're ready with allies through Nato to demonstrate to Putin that his aggression and his incursions, reckless or intentional, will be challenged'
| GETTYOslo Airport also had to close its airspace for three hours after sightings of two drones.
Moscow said it "firmly rejects" any suggestion of Russian involvement.
Donald Trump and the Nato secretary-general Mark Rutte said that members of the alliance should target Russian forces that violate their airspace when necessary.
Allies have pushed Moscow not to escalate the war in Ukraine into a wider conflict with Nato in Europe.