Cameron urges Greek euro exit plans

David Cameron has issued a stark warning to eurozone leaders that they must put in place proper contingency plans to protect their economies in case Greece drops out of the single currency.

He said Greek voters effectively faced an in-out choice when they go to the polls in next month's re-run elections amid fears a disorderly exit from the euro could trigger a new global financial crash.

The Prime Minister also denied that the G8 summit at Camp David had been a failure after it did not deliver a plan for resolving the country's debt crisis.

The message, delivered in Chicago, where he is now attending the back-to-back Nato summit, came as his Cabinet colleague Ken Clarke said the European banking system was already "in tatters". Mr Clarke said Britain was "heavily exposed" to potential problems and could be among the next targets for market speculation.

Mr Cameron insisted the meeting at the presidential retreat brought home to the eurozone leaders - including Germany's Angela Merkel - the need to deal with the issue. "I don't think it was a failure because I think it helped to crystallise the world's economic leaders and particularly crystallised the thinking of the eurozone leaders," he said.

He said they had to prepare for the prospect that the Greeks would vote for parties which rejected the terms of the country's international bail out - effectively consigning it to leaving the euro.

"We now have to send a very clear message to (the Greek) people - There is a choice, you can either vote to stay in the euro with all the commitments you have made, or, if you vote another way, you are effectively voting to leave," he said.

"The crucial thing is that eurozone leaders have to put in place contingency plans for both of those eventualities - really clear plans to keep our economies safe and stable.

"Greece is going to vote and that is going to focus minds and focus decisions on is Greece going to stay in the eurozone and is the eurozone going to make itself more coherent, or is it going to vote another way in which case proper, decisive contingency action must be taken.

"I think the G8 helped to crystallise that thinking of the eurozone leadership and for that I think it was worthwhile."