David Cameron today issued a blunt warning to French President Francois Hollande that Britain would not accept a Europe-wide financial transaction tax, insisting it was not "a sensible measure".

Speaking in Washington ahead of their first meeting since Hollande's election earlier this month, the Prime Minister said the eurozone leaders needed to take "decisive action" to resolve the crisis over Greece.

Cameron said he was looking forward to their meeting at the British ambassador's residence, adding they were both agreed on the need to promote growth and tackle their deficits.

However he also made clear his opposition to Hollande's demands for an EU tax on financial transactions which was a key plank of his election campaign.

He said: "We are not going to get growth in Europe or in Britain by introducing a new tax that would actually hit people as well as institutions.

"I do not think it is a sensible measure. I will not support it."

The two leaders were in the US capital for the G8 summit at the presidential retreat at Camp David - an event set to be dominated by events on the other side of the Atlantic.

Amid mounting fears across the continent that Greece could fall out of the single currency, triggering a fresh financial crisis, Cameron said the time had come for leaders of the eurozone nations to act.

He said: "Decisive action is needed by the eurozone. They cannot go on kicking the can down the road.

"This is in Britain's interest too because we want to have a successful growing eurozone on our doorstep and not the instability we have now."

With the uncertainty caused by the failure of the elections in Greece to deliver a clear result, Mr Cameron said the Greek people also had to come to a decision on their future.

"The Greeks have to make up their mind which direction they want to go in and then Europe has to make up it's mind about how to strengthen the situation and put beyond doubt the stability of the euro."