Osborne: 'Real progress' in avoiding eurozone crisis

George Osborne last night claimed "real progress" had been made in avoiding economic crisis in the eurozone after 10 hours of talks with EU finance ministers.

The Chancellor of the Exchequer said "important decisions" were being made to "strengthen European banks", including a programme of recapitalisation of the banks which could soar to €100bn (£87bn). "Britain will keep up pressure in the next few days for a comprehensive package to resolve the European crisis and to make sure that we get jobs and growth," Mr Osborne said.

Talks continue on a massive increase in eurozone bail-out funds and a planned 50-60 per cent writedown of Greek debt to ease the country's problems.

The UK Treasury is increasingly anxious that the talks reach a long-term solution, ending the "sticking plaster" proposals put forward in recent months. David Cameron is still expected to attend an emergency European leaders' summit on Wednesday, where the €440bn (£383bn) bail-out fund could be dramatically increased to €2 trillion (£1.74 trillion).

As a result, the Prime Minister could be forced to pull out of this week's major Commonwealth summit, The Independent on Sunday understands. Mr Cameron is due to fly to New Zealand and Australia on Wednesday, but he could be required to be in Brussels that day, government officials said.

The disclosure came as the head of the Institute of International Finance, which has been leading negotiations on easing Greece's debt, yesterday said eurozone countries and private-sector figures were "nowhere near a deal". In July, banks agreed to accept 21 per cent losses on Greek bonds.

Labour leader Ed Miliband yesterday criticised the Prime Minister for not insisting on attending Wednesday's meeting, even if it is officially restricted to eurozone leaders only.

Mr Miliband said Mr Cameron should be "banging on the door to maintain British influence" over Europe's future. However, as Britain is not a member of the euro, Mr Cameron would not be invited to the talks among 17 leaders of eurozone countries.

But No 10 sources indicated that the PM would go to Brussels if there was a full EU summit, shelving the long-scheduled trip to New Zealand and Australia. He is due to visit Christchurch, before travelling to Australia for the biennial Commonwealth Heads of Government Meeting. A visit to Japan has already been dropped so he can vote on a Commons motion proposing a referendum on Britain's membership of the EU.