British Defence Secretary Grant Shapps said Ukraine's attack on one of Russia's warships shows the power's "dominance in the Black Sea is now challenged".
Moscow confirmed that one of its ships was damaged after Ukraine's air force claimed it had destroyed a major Russian landing ship stationed in the Crimean waters on Tuesday morning.
The UK has welcomed these claims, as a sign the war has not reached a "stalemate".
In a statement, Mr Shapps said: “This latest destruction of Putin’s navy demonstrates that those who believe there’s a stalemate in the Ukraine war are wrong!
“They haven’t noticed that over the past four months 20% of Russia’s Black Sea Fleet has been destroyed.
“Russia’s dominance in the Black Sea is now challenged and the new UK and Norway-led Maritime Capability Coalition is helping to ensure Ukraine will win at sea.”
The Ukrainian Ministry of Defence said the large landing ship Novocherkassk was struck by aircraft carrying guided missiles.
One person was killed in the attack on the port of Feodosia, according to the Russian-installed governor of Crimea, Sergei Aksyonov.
Mr Aksyonov said the attack resulted in a fire in the town's port area that was promptly contained.
"All relevant emergency services are on site," Mr Aksyonov said on the Telegram. "Residents of several houses will be evacuated."
"And the fleet in Russia is getting smaller and smaller! Thanks to the Air Force pilots and everyone involved for the filigree work!" the commander of Ukraine's air force, Mykola Oleshchuk, said on the Telegram messaging app, without providing evidence.
The town of Feodosia, which has a population of around 69,000 people, lies on the southern coast of the Crimean peninsula.
Footage posted on several Russian news outlets on Telegram showed powerful explosions and fires over a port area.
The Russian-installed administration of Crimea said in a statement that due to "technical reasons" trains will not be departing from Feodosia for the time being and that street traffic was partially blocked in the town.
Russia's 369-foot long Novocherkassk landing ship going boom in occupied Crimea. 💥 pic.twitter.com/CPpHhCmEje
— Igor Sushko (@igorsushko) December 26, 2023
Both Russia and Ukraine have often exaggerated the losses they claim to have inflicted upon each other in the 22-month long war, while underestimating their own casualty and equipment losses.
Russia annexed Crimea from Ukraine in a move that was widely condemned by the international community in 2014.
Earlier this year, Former Russian president Dmitry Medvedev warned of nuclear retaliation if Ukraine attempts to seize the Crimean peninsula.
Mr Medvedev, who is currently the deputy secretary of Russia’s Security Council, said Russia is prepared to use “absolutely any weapon” in the event of an attack on Crimea.
