Greece Bailout: Britain Will Not Have To Pay

European leaders have agreed on a second financial bailout for Greece but it has been confirmed Britain will not have to pay towards it.

The new rescue package agreed by EU leaders last night is expected to total around 120 billion euros.

That cost will be borne by the other 16 countries using the single currency.

Although Britain will be kept out of the second aid programme, it will contribute about one billion euros in loan guarantees through its membership of the International Monetary Fund .

Germany had signalled that it expected all member states to share the burden of the bailout.

But earlier this week, aware of the potential domestic outcry if Britain had to stump up billions for Greece , Chancellor George Osborne told fellow EU finance ministers at talks in Luxembourg that the UK did not expect to be called upon.

Flying to the summit for talks over dinner, David Cameron reinforced the message, saying the UK wanted to see a healthy single currency - but one which dealt with its problems within the club of 17 eurozone member states.

Mr Cameron acknowledged the UK suffers when the eurozone suffers and therefore the UK would fulfil its financial obligations as a contributor to any IMF support.

But he said the UK government should not be expected to prop up Greece via a "European Financial Stability Mechanism" which commits all 27 member states to provide loan guarantees to a fellow member state in economic difficulties.

Summit officials said pushing the issue to the brink and trying to force the UK into a bailout - even though a qualified majority vote of the 27 leaders could push it through - would be too divisive.

A Downing Street source commented: "This is the right outcome for the British taxpayer."

The victory for Mr Cameron was confirmed by Herman Van Rompuy at a late-night press conference.

The EU leaders also issued a statement saying a new financial programme would be based on the current arrangement of support from the eurozone, coupled with the IMF, to which the UK is a contributor.

The EU was also ready to release the latest slice of money to Greece under the original three-year bailout deal - on the basis that the Greek parliament votes through tougher austerity measures in a vote in Athens next week.

Earlier UK Independence Party leader Nigel Farage said the UK was in effect contributing to another bailout because of its IMF involvement.

"David Cameron is being totally disingenuous when he says UK will not contribute to Greek bailout: the UK has already contributed 1.2bn euro (£1bn) in the first Greek bailout (via the IMF) and has agreed to double its contribution to the IMF by giving an extra £9.2bn," he said.