The Prime Minister has admitted the there is a very real danger that Europe could face a single currency break-up unless urgent action is taken.
Speaking in the House of Commons earlier Mr Cameron told MPs: "The eurozone has to make a choice.
"If the eurozone wants to continue as it is, then it has got to build a proper firewall, it has got to take steps to secure the weakest members of the eurozone, or it is going to have to work out if it has to go in a different direction.
"It either has to make up or it is looking at a potential break-up. That is the choice they have to make and it is a choice they cannot long put off."
The Prime Minister has repeatedly made the case for the eurozone to take "decisive
action" to restore stability caused by the current crisis over Greek debt.
Mr Cameron's warning was echoed by the governor of the Bank of England who delivered a scathing verdict on the handling of the eurozone debt crisis and confirmed contingency plans for a potential break-up of the single currency.
Former Bank of England Monetary Policy Committee member Andrew Sentance told Jeff Randall Live : "since the financial crisis the Bank hasn't picked up the changes in the structure of the economy and the forces affecting inflation and growth."
Sentance: "We appear to be having high inflation, not just as a blip, but on an ongoing basis and the Bank has an obligation to keep it down."
Sentance: "Growth is going to be relatively weak in the UK and also in many other western economies, but inflation will be relatively high so governments will have to deal with that for some time."
Sentance also told Jeff Randall Live : "I hope the bank will start to think about the value of the pound. It is appreciating against the Euro it may help shield us from inflationary pressures we've seen before."
Sir Mervyn King, at the launch of the Bank's quarterly inflation report, admitted discussions were being held in the UK on how to handle the collapse of the euro.
The Bank, the Treasury and the Financial Services Authority are contemplating the worst-case scenario, which would send shockwaves around the world.
In the report , the Bank warned of continued risk of a "disorderly" outcome for the eurozone, as part of its wider forecasts for the UK economy .
Sir Mervyn admitted that the bank could not quantify the most extreme risks from the single currency area but declared that the UK's biggest trading partner was "tearing itself apart without any obvious solution."
He said "Just kicking the can down the road is not an answer."
His comments came as the turmoil in the region continues after Greek political leaders failed to form a coalition government, forcing a new election in June.
The country could be denied further EU bailout funds if a party opposing drastic austerity measures comes to power, which could lead to Greece leaving the euro.
As Sir Mervyn spoke, investors continued their flight from risk over the crisis.
In addition to the bleeding of value in Greek equities, there has been something of a run on the country's banks as depositors move to protect themselves from a potential devaluation.
As much as 700 million euros (£569m) was reportedly withdrawn in a single day.
The jitters crossed into Spain and Italy again in early trading as the contagion widened - with the spread on 10 year bonds between Spain and Germany reaching a new record high earlier.
The euro also hit a three-and-a-half year low.
The FTSE 100 share index lost 1% on opening - leaving it at a new low for 2012 - but later recovered much of that ground.
There were similar falls on the main stock markets in France, Germany, Italy and Spain though they too erased those losses by lunchtime.
Jane Foley, senior foreign exchange strategist at Rabobank, told Sky News there had been a rush towards the dollar in recent days as investors ran from risk.
She believed the latest market moves were evidence of the damage the Greek crisis can inflict elsewhere.
She said: "Over the last two years, firewalls have been put up to try and stop some of this rot but...contagion is carrying on.
"We're very concerned that if Spain does ultimately need a bailout, it might just be too much that the eurozone can bear."