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The Russian president will likely face “political consequences” when the country next goes to the polls in 2024, particularly as rumours about his health continue to circulate, they said.
The Kremlin has clamped down on independent media and free speech in an attempt to prevent facts about the country's widely condemned war reaching the population.
However, punishing sanctions in response to the invasion, and the withdrawal of major companies, has put Russia's economy on track for the biggest contraction since 2008.
Russians were told that they would be welcomed in Ukraine, but in the five months since the war began the country has seen a “huge increase in spending on funerals” as an estimated 20,000 troops have been killed in the fighting.
“The election that is due in June 2024 is certainly looking more interesting than it perhaps was six months ago,” Western officials said.
They added: “The damage that [Putin] is doing to Russia standing in the world, to Russia economically, to Russia's future. The way he is humbling Russia. There will be political consequences.
“People are talking more about about succession now in a way that they were not six months ago. So it does seem to me to open that discussion up again.
“And the next sort of potential opening is 2024. Of course, it might not happen because the elections might not happen.”
Officials added that it is unlikely Putin will see any threat to his leadership before 2024, but there was also “certainly more chatter about his health” in the country.
But it “is clear and it's becoming clearer as we move into the autumn, that [the invasion] was such a huge strategic error”, they said.
Earlier this month Mr Putin appeared puffy and shaking as he presented a medal during the State Prize of the Russian Federation, fueling speculation about his fitness.
There have been unverified claims the 69-year-old is fighting cancer.
Moscow has refuted the claims and insisted that he is healthy.
The UK's Ministry of Defence highlighted the reported “first successful use of Western-donated Harpoon anti-ship missiles” to sink a Russian tug.
The attack had thwarted Russian efforts to resupply its forces on Snake Island which has been fiercely fought over.
The MoD said: “On June 17 2022, Ukrainian forces claimed their first successful use of Western-donated Harpoon anti-ship missiles to engage Russian maritime forces.
“The target of the attack was almost certainly the Russian naval tug Spasatel Vasily Bekh, which was delivering weapons and personnel to Snake Island in the north-western Black Sea.
“The destruction of the Russian vessel on a resupply mission demonstrates the difficulty Russia faces when attempting to support their forces occupying Snake Island.”