Officials of the European Central Bank were this evening holding an emergency telephone conference in the hope of heading off renewed panic over Italy when financial markets reopen on Monday.
The eurozone bankers were understood to be discussing the possibility of buying up Italian Government bonds to help put a lid on the soaring interest rates that are threatening Rome's finances.
The proposed intervention follows a week of market meltdown around the world sparked by fears that Italy and Spain may be unable to pay their debts.
And it comes a day after the international financial system was plunged into further uncertainty by the downgrading of US credit from Triple-A to AA+ for the first time in its history.
The conference call came as a Government minister admitted that Britain would feel the impact of events in the eurozone, but had "limited" ability to influence them.
Foreign minister Alistair Burt told the BBC that eurozone countries must deliver on their July 21 agreement to bail out Greece.
"Individual countries have got to show that they have got the same sense of commitment to the measures necessary in their countries to reduce their debt and restructure their economies," he said.
"This is something that does have an effect on us even though we have been in a different position largely because of the steps we took when we came into government last year.
"Our ability to influence it is limited... We have to recognise that what happens in other countries is very much a matter for them."
Despite falls of almost 10% in the FTSE 100 index last week, ministers have insisted that Britain is a "safe haven" in the current turbulence, because ratings agencies regard it as low-risk thanks to the Government's deficit reduction programme.
Business Secretary Vince Cable today said that the UK was "on the edge of the storm".
But he admitted that growth forecasts would "almost certainly" be downgraded over the coming week and raised the prospect of a double-dip recession if banks do not increase lending.
"The top priority now, to boost growth and jobs and avoid a double-dip, is making the banks lend again," Mr Cable told the Sunday Times.
"People's living standards have been quite badly hit. That is only going to change if we get sustainable growth. It's too early to say when."
Shadow chancellor Ed Balls accused the Government of "complacency" for assuming that the UK can avoid the impact of the current instability.
Writing in the Sunday Mirror, Mr Balls said that the current situation called for leadership from the UK, but added: "Our PM, Chancellor and their deputies are nowhere to be seen: the four top people in No 10 and the Treasury are all on holiday at the same time.
"But it's a lack of leadership over the last year that has done the damage, not just the last week. In previous times of crisis, the British Chancellor would be at the head of the table co-ordinating the global response, but for months Mr Osborne has been absent from the debate about how to get the world economy growing."
Former deputy prime minister Lord Prescott said it was "unbelievable" that Mr Cameron, Chancellor George Osborne and DPM Nick Clegg should all be on holiday at the same time.
"What we did, Tony and I, we had all ministers to give us their holiday times and we insisted that there was a senior minister about all the time, and junior ministers also," Lord Prescott told BBC1's Andrew Marr Show.
"How the heck does Osborne, nine or ten hours different, have a telephone call halfway through the night talking about the crisis?"
But Mr Burt dismissed Lord Prescott's comments: "The Prime Minister is always in charge, wherever he might be. Technologically, you can be in contact anywhere."
Mr Cameron has broken off from his holiday in Italy to talk with Mr Osborne - himself vacationing in the USA - Bank of England Governor Sir Mervyn King, German Chancellor Angela Merkel and French President Nicolas Sarkozy over the past few days.
But there is no suggestion of the PM cutting his break short, and a proposal from Italian Prime Minister Silvio Berlusconi for a meeting of G7 finance ministers, including Mr Osborne, has so far not materialised.