Shares in British banks were up on the FTSE 100 in morning trading after reports emerged that a deal is being put together to attempt to solve Greece's debt crisis.

A report in Dow Jones quoted a senior Greek official as saying that a new 60 billion euro bailout package is likely to be confirmed next month. However a different official told Reuters that no additional bailout is being discussed.

Yesterday also saw ratings agency S&P downgrade Greece's sovereign rating to B, while Moody's threatened a downgrade and Fitch kept Greece on a negative outlook.

By 10:00 shares in Lloyds Banking Group were up 0.80 per cent to 54.01 pence per share, RBS shares increased 1.92 per cent to 42.50 pence per share, Barclays shares rose 1.13 per cent to 277.05 pence per share and HSBC shares climbed 0.68 per cent to 652.60 pence per share.

Overall the FTSE 100 was up 0.86 per cent to 5,993.82.