Shares in British banks were up on the FTSE 100 in morning trading as talks on a second Greek bailout look set to be concluded tomorrow.

Greece looks set to default on its debt next month unless it receives another bailout. The debt stricken nation is in talks with the European Union, the International Monetary Fund and the European Central Bank to receive another £10.5 billion, after it received a bailout last year.

While the bailouts have been condemned by some as being damaging to Greece, on the grounds that the last thing a debt saddled nation needs is more loans, others fear that a Greek default could be a "Lehman Brothers 2" in terms of its impact on the global economy and financial system.

The news that a second bailout may soon be confirmed appeared to reassure investors.

By 09:30 shares in Lloyds Banking Group were up 0.19 per cent to 52.10 pence per share, RBS shares increased 0.33 per cent to 42.74 pence per share, Barclays shares rose 0.02 per cent to 276.70 pence per share and HSBC shares climbed 0.16 per cent to 635.80 pence per share.

Overall the FTSE 100 was down 0.03 per cent to 5,988.11.