George Osborne and his European counterparts are gathering today in Budapest, the Hungarian capital, for crisis talks after debt-stricken Portugal finally issued a formal request for help.

Fears were growing last night that Spain could be next in line for a humiliating European bailout as it emerged that Britain could face a £6billion bill to rescue Portugal.

George Osborne and his European counterparts are gathering today in Budapest, the Hungarian capital, for crisis talks after debt-stricken Portugal finally issued a formal request for help.

The Chancellor last night insisted that Portugal’s fate demonstrated that Britain would be ‘playing Russian roulette’ with the economy if it did not press ahead with painful spending cuts and tax rises to restore the public finances to health.