DAVID Cameron said last night that “some good progress” had been made by EU leaders at an emergency summit towards agreeing a package of measure to resolve Europe’s debt crisis.

The Prime Minister joined the other 26 EU leaders for urgent talks in Brussels amid mounting concerns about Europe’s economic prospects – with German Chancellor Angela Merkel branding it the continent’s worst crisis since the Second World War.

Emerging from the meeting – which will be followed by talks between countries who use the single currency – Mr Cameron said particular progress had been made on moves to recapitalise banks which had “not been watered down” and was now agreed as part of a three-pronged strategy.

“We have made some good progress tonight,” he said.

Bank recapitalisation would only go ahead when all parts of the plan were agreed, he said, telling eurozone leaders: “Further progress on that needs to happen tonight.”

Summit conclusions from the 27-leader meeting confirmed approval of the first of three key accords – strengthening the liquidity of the most exposed banks in Europe.

The recapitalisation of Europe’s vulnerable banks – none in the UK – involves increasing their reserves by more than 100 billion euros (£87bn).