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EU leaders plan further rescue package talks

Yet another summit of EU leaders may be needed next weekend to complete plans for a comprehensive economic rescue package, officials in Brussels said last night.

Today's one-hour gathering of the 27 leaders, followed by a much longer session of the 17 leaders of the eurozone countries, will go ahead as planned, although it was announced yesterday that a meeting of EU finance ministers (Ecofin) has been cancelled.

Markets reacted badly to the news, assuming a failure to agree a long-term deal, but officials said the move was procedural, with the finance ministers now likely to meet later in the week, instead of before the main talks.

That meeting might be followed by another summit to complete any agreement reached at today's talks.

Chancellor George Osborne had planned to be back in Brussels tomorrow for talks with his colleagues, but the Prime Minister's official spokesman said: "My understanding is that there is no Ecofin meeting tomorrow."

He added: "When this was being discussed in the last few days, there was a debate going on as to what order the meetings should come in - should there be an Ecofin before the European Council (summit) or should there be a European Council and then an Ecofin.

"The presidency (of the EU) have decided not to have an Ecofin meeting tomorrow. Of course, it is possible that there will be an Ecofin at a later stage.

"They will use where they got to in Ecofin last Saturday to inform the leaders' discussions."

Asked if the PM - who has already cancelled trips this week to Japan and New Zealand - was concerned about Europe's finance ministers not meeting tomorrow, he said: "What order the meetings come in and how many meetings there are is slightly less important than whether we get a comprehensive resolution to this."

Meanwhile, frantic behind-the-scenes talks were going on in a bid to put in place provisional accords on all three key issues which EU leaders need to agree at the next phase of meetings.

They include the provisional agreement already in place on the recapitalisation of Europe's most exposed banks and leverage on an existing €440bn (£383bn) bailout fund into something above a €1 trillion fund, to demonstrate a capacity to respond to any more Greek-style meltdowns.

A decision is still also being awaited on a demand that price investors - banks - absorb at least a 50% write-off of their loans to Greece, which all agree will never be able to repay its lenders in full.