The UK is right to be bailing out Ireland but the likes of Spain and Portugal should turn to fellow eurozone countries if they need financial help, shadow chancellor Alan Johnson said.
As European Union finance ministers met in Brussels to discuss an 85 billion euro (£72.1 billion) package for the Irish economy - with the UK believed to be offering around £7 billion, including through a bilateral loan - Mr Johnson said the deal was in Britain's financial interests.
But as he expressed "concern" about the spread of problems to Spain and Portugal, he said eurozone countries should be the "first point of call" if they required a bailout.
Asked on BBC1's Andrew Marr show whether Chancellor George Osborne was right to be offering financial help, Mr Johnson said: "I think he is right to give assistance to Ireland. There are a number of questions beneath that - what is this level of assistance; if we are paying through the IMF, because we are big contributors to it, and we are paying through the European stabilisation mechanism, why are we contributing through a bilateral loan as well? Or are they different things?
"We don't know the exact money yet and we don't know the detail, we don't know the rate of interest, we don't know what conditions are going to be set.
"But I think we are right to help a friend in need, and I think it would damage this country - they are our fifth-biggest export market - it would damage our country if we didn't help Ireland to resolve their problems."
Mr Johnson said Britain should "certainly not" be hoping that the euro collapsed as a currency but said he was "worried" about the eurozone.
"I am concerned about contagion, about what's happening with Spain and Portugal," he said, before pointing out that Labour former chancellor Alistair Darling had been involved in the talks which resulted in a bailout for Greece earlier this year which the UK did not contribute to.
"We didn't put a penny into the bailout of Greece, it was for eurozone countries to do that, and I believe that's where the fundamental first point of call needs to be."
Mr Johnson also criticised Foreign Secretary William Hague for having said "who knows" whether the euro would survive.