European commission proposes using UK contributions towards Greek bailout

Plan is a blow to British PM David Cameron who thought he had secured a 'black and white' opt-out from further bailouts for eurozone countries

The European commission has defied George Osborne, the UK chancellor, by formally proposing an emergency loan for Greece through an EU-wide bailout fund using up to 850m of British contributions.

The proposed use of the European Financial Stability Mechanism fund is a blow to the UK, because David Cameron thought he had secured in 2010 a "black and white" British opt-out from participating in any further bailouts for eurozone countries.