The initiative, outlined in Brussels, came as Madeleine Albright, the US Secretary of State, accused Slobodan Milosevic of deliberately depriving refugees inside Kosovo of food and shelter.
She added a warning that it was "Milosevic's responsibility to make sure that they do not starve or die from lack of medicine".
Later Robin Cook, the Foreign Secretary, said that military commanders had been asked to study the possibility of air drops and other unspecified ways of getting supplies to the refugees.
However, the idea is likely to be controversial in Nato, because of the difficulty of restricting the drops to areas where refugees - and not Serb military forces - get access to the food or medicine.
The initiative came in a statement after talks among Nato foreign ministers in Brussels, in which Ms Albright said that the Western alliance had to "redouble its engagement to resolve the humanitarian crisis created by Milosevic's depredations".
She added: "Belgrade is taking every opportunity to make a bad situation worse. We are deeply concerned that as many as 700,000 people are now homeless within Kosovo.
"It appears that Belgrade is deliberately depriving them of food and shelter. Either Milosevic must feed his people or Nato must respond to their plight". The Secretary of State also praised the efforts of non- governmental organisations from Greece which have been trying to finds ways of working inside Kosovo to relieve the plight of the refugees.
Javier Solana, Nato secretary-general, also emphasised the importance of Nato's humanitarian task, which had, he said, become its top priority.
Mr Cook said that air drops, which were made in Bosnia, could be successful.
"We have done it before," he said. "We have asked our military to examine the options and to report to us." Mr Cook said the dire predicament of the refugees had been made clear to him during contacts with a senior member of the Kosovo Liberation Army.
The West, he added, "clearly hold President Milosevic responsible for the refugees".
A spokesman for the Yugoslav foreign ministry, Nebojsa Vujovic, dismissed the air-drop plans as a propaganda stunt designed to draw attention to a humanitarian crisis which did not exist.
n Doctors were last night trying to save the leg of a French journalist wounded with 11 Kosovo Liberation Army fighters when Serbian artillery bombarded the Albanian border town of Padesh.
Albanian military surgeons made an appeal to the French embassy in Tirana to provide a helicopter to take Franc Brocker for emergency surgery in Italy. "If he doesn't get treatment quickly, he will lose the leg," Nuredin Malaj, of the Central Military Hospital in Tirana, said.Reuse content