David Cameron urges Greeks to make a choice on eurozone

• Greece will hold another election on 17 June

• It is feared that an anti-auterity party could take Greece out of the eurozone

Cameron insisted that failure to provide clarity could prove disastrous for the world economy.

Greeks go to the polls on 17 June after elections last month failed to produce a government.

There are fears that the victory of anti-austerity parties could lead to a Greek exit from the common currency.

Mr Cameron, who is in America for back-to-back G8 and Nato summits, said talks with fellow world leaders had “crystallised” the problems.

“We now have to send a very clear message to (the Greek) people - There is a choice, you can either vote to stay in the euro with all the commitments you have made, or, if you vote another way, you are effectively voting to leave,” he said.

“The crucial thing is that eurozone leaders have to put in place contingency plans for both of those eventualities - really clear plans to keep our economies safe and stable.”

He went on: “What I think would be bad for Greece, bad for Europe, bad for the world would be if we just allowed the can to be kicked down the road with an inconclusive outcome,” he said.

“It has just got to try and make sure that this is a moment of clarity and decisiveness for the eurozone.”

The premier indicated that German chancellor Angela Merkel - who has driven the demands for austerity and fiscal discipline within the eurozone - had shown signs of a willingness to compromise.

“I think she did show some flexibility in terms of what more can be done on the growth agenda and also what more can be done to handle the risks inside the eurozone,” he said.

“The fact that you have got countries like Japan, America, Canada round the table, as well as Britain, who are outside the eurozone but affected by what happens inside the eurozone, I think, was helpful in bringing that important pressure to bear.”