The British government will reject efforts by euro zone countries to use a budget funded by all 28 states to help rescue Greece, following signals from the European Commission and France, sources in London made clear last night.

The European Financial Stability Mechanism, which still has €11.5 billion left in the kitty, was replaced when another, much larger fund, the European Stability Mechanism was created in September 2012.

However, commission officials, supported by France, are now understood to be eyeing the older fund because its reserves can be distributed by a simple qualified majority of EU states, which is much harder for opponents to block.

British chancellor of the exchequer George Osborne has already told his German counterpart, Wolfgang Schäuble, that London will not tolerate its €1 billion share of the fund being used to offer a bridging loan to Athens.

"Our euro zone colleagues have received the message loud and clear that it would not be acceptable for this issue of British support for euro zone bailouts to be revisited," a treasury official told the Financial Times.

Earlier, Osborne had offered “a cautious welcome” for the early-morning agreement reached between the euro zone countries in Brussels.

However, he warned of the risks to the European economy, including Britain.

“I think Britain can give a cautious welcome that the euro zone has stepped back from the brink because it’s pretty clear that these problems in Greece and across Europe have an impact on our economy,” he said.

“We have got to look at the details of this deal that’s been done overnight, make sure it all works for our country as well as the rest of Europe, but I think what we really want to see now is this turned into a lasting solution because this risk from Greece hangs over the whole European economy, including Britain.”