Swinging from offering diplomacy to sending in warships, Turkish President Recep Tayyip Erdogan warned he will forge ahead with plans to drill for oil and gas off Greek islands despite a tense naval standoff there.

"We will never bow to banditry on our continental shelf. We will not back down against the language of sanctions and threats,” he said, in reference to Turkey claiming parts of Greek waters as European Union leaders have been reluctant to impose sanctions, fearful he will send more refugees and migrants into Greece.

He spoke as the Turkish energy vessel the Oruc Reis and Turkish warships were near the Greek island of Kastellorizo that some hard-core elements in his government have urged him to invade and seize.

"We have shown that we have softened our stance. However, Greece does not respond to this approach. If they continue like this, we will do whatever is necessary,” he said.

That referred to his earlier offer to host a session in Ankara with officials from the two countries to discuss overlapping claims to waters in the Aegean and the East Mediterranean, Turkey backed by the United States which said parts of the seas are “disputed.”

"At the moment, our priority is to protect our rights to the maximum in the Eastern Mediterranean, Libya and the Aegean,” said Erdogan of a deal Turkey made with Libya dividing the seas between them, claiming some Greek waters.

Greece responded with a similar deal with Egypt, leading a furious Erdogan to scuttle the negotiations and the EU's foreign chiefs to host a meeting in which Germany refused to support Greece, leaving sanctions up in the air now.

Greek Prime Minister Kyriakos Mitsotakis  "no challenge will go unanswered" while Turkey said any attack on its ships would draw immediate return fire.