Shares in British banks were up on the FTSE 100 in morning trading as a deal on a second Greek bailout appeared to edge closer today.

A report in the Wall Street Journal suggested that Germany is considering making concessions that would lead to a new bailout for Greece, a year after the debt struck nation received its first bailout.

Without a second bailout, Greece looks set to run out of money in less than two months if it carries on with current spending levels. It has been suggested that a Greek default could be "Lehman Brothers 2" in terms of its impact on the global economy and financial sector.

News that a second bailout was closer appeared to ease the concerns of investors.

By 10:45 shares in Lloyds Banking Group were up 0.23 per cent to 52.88 pence per share, RBS shares rose 1.02 per cent to 42.67 pence per share, Barclays shares climbed 0.76 per cent to 277.35 pence per share and HSBC shares increased 1.08 per cent to 637.30 pence per share.

Overall the FTSE 100 was up 1.10 per cent to 6,003.88.