The damage to the rest of Europe from Greece leaving the euro would be “somewhere between catastrophic and Armageddon”, the chief negotiator for the body representing private sector holders of Greek bonds said yesterday.

Washington has increased the pressure on the EU to resolve the debt crisis, especially the Greek case, by pushing for the eurozone to take a hit on Greek bonds.

GREECE was closing in on an initial deal with private bond holders last night that would prevent it from tumbling into a chaotic default but lose investors up to 70% of the loans they have given to Athens.

FRANCE yesterday offered a radical solution for banks to roll over holdings of Greek debt for 30 years as the Greek government fought to get backbench rebels to support a crucial austerity plan to avert bankruptcy.