France 'proposes EU bailout package'

France will push for European leaders to unveil a €300 billion (£237 billion) rescue package for financial institutions at a summit scheduled for this weekend, reports claim.

French president Nicolas Sarkozy is understood to want a similar bailout plan currently going through Capitol Hill in the US for the European Union.

The Bush administration's $700 billion (£394 billion) bailout is yet to be approved, with Congress voting on the proposals today and tomorrow.

A source quoted by the Reuters news agency said Mr Sarkozy wanted an EU version of the plan to stave off the threat of more banks collapsing.

"France will propose at the Saturday meeting a European rescue plan with a volume of €300 billion," an EU source told Reuters.

A spokesperson for the country's finance ministry later told Reuters: "We will make no comment on that."

According to Bloomberg, the French finance minister, Christine Lagarde, will confirm the president's intent, in an interview to be published tomorrow.

"What will happen when a smaller European Union member state is threatened with a banking failure?" Ms Lagarde reportedly told Germany's Handelsblatt.

"It may not have the resources to save the company. This is where a European rescue package becomes a possibility."