George Osborne backs down on use of EU bailout fund in Greece crisis

In a compromise, chancellor reassures taxpayers there will be an 'impregnable ringfence' around the up to 850m of British-backed funds in the EFSM

George Osborne has backed down over the use of an EU bailout fund to give an emergency loan to Greece. But the chancellor said there would be an "impregnable ringfence" around the up to 850m of British money in the fund to prevent any losses to the taxpayer in the event of any default.

The chancellor argued it was a major victory for Britain in the EU because he had made it a "red line" that UK funds would not be threatened. But Eurosceptics will paint it as an example of Brussels reneging on an agreement with the UK, as David Cameron thought he had secured an opt-out from the EU-wide bailout fund being used after it was set up to help Ireland and Portugal in 2010.

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