In his report, submitted to the council on Monday, Mr Annan declined to make any formal judgement on whether Mr Milosevic had adequately responded to the latest UN resolution on Kosovo calling for an end to the eight- month conflict. But his text included several references to cruel repression of ethnic Albanians carried out since the adoption of the resolution on 23 September.
Britain, the holder of the UN presidency, sought to underline Mr Annan's harsh words, which may guide a pending decision on whether Nato makes air strikes against Serb military targets.
"We didn't ask Mr Annan to take a line," one British source said. "We asked for a narrative and that is what we got. And it makes very alarming reading."
However, no further action was expected last night from the council, which remains deeply divided.
The text of the latest resolution could be seen as at least an orange light to military action. It stops short of authorising the use of "all necessary means" to ensure enforcement - the UN code for such a step.
In his report, Mr Annan said he was "outraged by reports of mass killings of civilians in Kosovo, which recall the atrocities committed in Bosnia and Herzegovina". Underscoring the "deep trauma and despair of displaced populations" in Kosovo, Mr Annan said he was concerned that the "disproportionate use of force and actions of the security forces are designed to terrorise and subjugate the population".
Mr Annan went on: "The Serbian forces have demanded the surrender of weapons and have been reported to use terror and violence against civilians to force people to flee their homes or the places where they had sought refuge, under the guise of separating them from fighters of the Kosovo Albanian paramilitary units."