David Cameron has held emergency talks with officials from the Treasury and the Bank of England to prepare for a possible Greek exit from the Eurozone.
The Prime Minister held meetings this morning, as the chances of a "Grexit" increased following a defiant speech from prime minister Alexis Tsipras yesterday. Although the UK isn't part of the Eurozone, officials are concerned about the chances of contagion hitting Britain's business and financial sectors.
In a speech affirming his pre-election promises yesterday, the new Greek Prime Minster ruled out an extension to his country's bailout, refusing to back down on his plans for a new spending programme.
Cameron's meeting, which was also attended by officials from the Foreign Office and the Department for Business, addressed eventualities including the potential of a breakup the euro. George Osborne did not attend, because he was on the way to a G20 meeting in Istanbul.
Although the government did make contingency plans following the previous Greek crisis in 2012, changes to legislation - including new rules from the European Central Bank, the introduction of a bond-buying programme and improved growth in vulnerable economies such as Ireland - mean new plans must be drawn up.
European markets fell today as investors took into account the possibility of a Grexit. The FTSE was down 0.7 per cent in mid-afternoon trading, while Germany's Dax fell 1.9 per cent and France's Cac dropped 1.5 per cent.
The falls come ahead of an emergency meeting of finance ministers on Wednesday.
The chances of a Greek exit from the euro are now thought to be about 50 per cent.