Chancellor George Osborne has declared "real progress" in Europe's battle to beat the economic crisis and restore confidence in the stability of the single currency.

He emerged after ten hours of talks with fellow EU finance ministers in Brussels to announce "important decisions" to strengthen Europe's banks.He gave no details but the talks reached "provisional" agreement on recapitalisation of the banks to the tune of almost 100 billion euros (£87billion).

The accord is conditional on a complex and much wider EU deal being forged in the next few days, including a massive increase in eurozone bail-out funds and a planned 50-60 per cent write-down of Greek debt to ease the country's problems and reduce the risk of "contagion" to other, bigger economies such as Italy.

"It was very important today that Europe took decisions," said Mr Osborne. "After ten hours of talks we have made real progress and we have come up with important decisions to strengthen European banks."

The outline accord was just one part of the economic recovery jigsaw, said the Chancellor, adding: "Britain will keep up pressure in the next few days to a comprehensive package to resolve the European crisis and to make sure that we get jobs and growth."

On Sunday it is the turn of Prime Minister David Cameron, who will attend an EU leaders' summit to add more safeguards to the EU's economic armoury to counter a crisis which has threatened to get out of control.

On the table are a massive increase in an existing 440 billion euro (£383billion) bail-out fund - possibly four-fold to about two trillion euros (£1.74trillion).

But more progress depends on resolving major disputes over details between German Chancellor Angela Merkel and French President Nicolas Sarkozy.

They were meeting over dinner in Brussels to thrash out concerns over how big the bail-out fund should be and how far to go to give Greece a huge "discount" on its mounting debts.

It was supposed to be a make-up dinner for two - but tonight they were being joined by International Monetary Fund chief Christine Lagarde, outgoing European Central Bank boss Jean-Claude Trichet, European Commission President Jose Manuel Barroso and EU Council President Herman Van Rompuy.