Chancellor George Osborne has warned that the ongoing stand-off between eurozone countries and Greece could pose a risk to Britain's economic stability.
Speaking ahead of Greece going into third round talks over how to deal with its debt crisis, Britain's chancellor indicated a solution needed to be found soon before other European countries suffered.
He told Sky News: "What you see now in this stand-off between the eurozone and Greece is the risk of a full-blown crisis which would do real damage to the European economy and is a risk to Britain.
"We need the eurozone to find a common solution and here at home we need to go on working through our economic plan, which has kept us safe."
Finnish finance minister Antti Rinne has said he is "hopeful" that a deal will be reached by eurozone leaders today when they discuss the potential extension of Greece's bailout programme.
In a live streamed interview with the newspaper Helsingin Sanomat he said: "Last night, a spark of hope arose that an understanding could be reached ... so that Greece could continue the underlying programme to strengthen its economy."
Greece is set for a third round of bailout talks today after making a formal request for a six month extension to its loan agreements yesterday.
The debt-ridden country said it would honour debt obligations and agree to continued supervision from bailout lenders and the European Central Bank if its request is accepted.
Last night German officials branded the Greek's offer as "a Trojan horse" and indicated that Greece could face stiff opposition to a deal being agreed unless changes were made to meet criteria previously discussed by the Eurogroup.
Greece finally backed down and asked for a six month extension to its EU bailout programme - but Germany said no. Greece's anti-austerity government had offered some concessions, but German officials called the proposal a 'trojan horse' - which would not guarantee Athens would pay back its existing loans.
Germany's finance ministry have 'rejected" Greece's proposals for an extension to its current bailout programme.
Ministry spokesman Martin Jaeger issued a statement stating the request from Athens for a six-month extension of Greece's loan agreement fell short of the conditions previously set out by Eurozone partners.
He said: "The letter from Athens is not a proposal that leads to a substantial solution.
"In truth it goes in the direction of a bridge financing, without fulfilling the demands of the program. The letter does not meet the criteria agreed by the Eurogroup on Monday."
Greece has reportedly pledged to honour all its debts as part of an official bailout extension request made earlier today.
The debt-ridden country has asked for a six-month extension of its bailout programme, and according to documents seen by Reuters agreed that they "will not take unilateral action to undermine the agreed fiscal targets" in the process.
The document said: "The Greek authorities honour Greece's financial obligations to all its creditors as well as state our intention to cooperate with our partners in order to avert technical impediments in the context of the Master Facility Agreement which we recognise as binding vis-á-vis its financial and procedural content."
Junior ministers and central bank officials are expected to discuss the details of the formal request by Athens to extend the country's 'loan agreement' in a teleconference later today. Euro zone finance ministers are then expected to discuss the request and make a decision in Brussels on Friday.
The Greek government has formally submitted a request for an extension to its existing loan agreement.
Government officials told Reuters today that they had asked for their bailout deal to be extended by an additional six-months.
Eurogroup president Jeroen Dijsselbloem confirmed he had received the request.
Greece intends to ask for an extension of its loan agreement with the euro zone on Wednesday, Reuters have reported, citing a source inside Brussels.
The source distinguished this request from Greece's wider bailout programme.
Speaking on condition of anonymity, the source said that Athens would request up to a six month extension but the conditions were still under negotiation.
George Osborne said European leaders were reaching "crunch time for Greece and the euro zone" and warned failure to reach a deal would be "very severe for economic and financial stability."
Echoing the alarm European Union officials have voiced about the negotiating tactics of Greece's left-wing government, the Chancellor added: "What Britain really needs to see is competence, not chaos."
EU finance ministers are today piling pressure on Greece to remain in an international financial rescue program as the euro weakened on fears of disruption when Athens' credit lines expire in 10 days time.
Greek Finance Minister Yanis Varoufakis said:
The next step is the responsible step. We will continue to deliberate, in order to enhance the chances and actually achieve a very good outcome for the average European.
Austrian finance minister Hans Joerg Schelling has said he expects a Greek request for an extension to their bailout agreement by Friday.
Schelling said "the only technical, legal solution is for Greece to request a bail-out extension."
Although Schelling was unclear as to when such a request would come he did state that he believed Greek's finance minister "will honour his commitments".