19/06/2015 05:41 BST | Updated 19/06/2015 07:59 BST

UK 'Preparing For The Worst' Amid Fears Greece Will Exit Eurozone, Says George Osborne

Yorgos Karahalis/AP
Greece's Prime Minister Alexis Tsipras speaks with visiting Austrian Chancellor Werner Faymann in Athens, Greece, on Wednesday, June 17, 2015. Tsipras has described demands by rescue lenders to slash pensions as incomprehensible and warned that a failure in bailout talks would hurt all of Europe. (AP Photo/Yorgos Karahalis)

George Osborne has issued a stark warning that Britain is preparing "for the worst" - Greek exit from the eurozone.

An emergency summit of the European Central Bank (ECB) has been called for Friday morning, amid a stand-off between the European Commission and Athens. In under two weeks Greece is due to pay back a €1.6bn (£1.1bn) loan to the IMF.

The ECB has said it will give Greece a bailout loan to make the repayment, but only if it slashes public spending, specifically pensions - a deal Alexis Tsipras' government has so far resisted.

If Greece fails to meet the deadline there could be a run on Greek banks and the country could be pushed out of the eurozone.

Speaking ahead of today's Economic and Financial Affairs Council meeting, Osborne said Europe had "entered the eleventh hour of this Greek crisis" and urged the Greek government "to do a deal before it is too late".

“We hope for the best, but we now must be prepared for the worst. And in the United Kingdom we’ve taken the measures to increase our economic security so we can deal with risks like this from abroad. And clearly now we must go on and complete that plan," he said.

Last night IMF chief Christine Lagarde was scathing about the Greek brinkmanship. "we need a proper discussion with some adults in the room," she said. But Tsipras attempted to talk people back from the ledge. "All those betting on a crisis will be proved wrong," he said.

The focus will now shift to Monday's emergency summit meeting in Brussels of the eurozone leaders which may offer the last chance of an agreement.

The possibility of Grexit hangs over next week's full EU summit, where David Cameron hopes to start his renegotiation of Britain's membership proper.