Spain could be next to seek a financial lifeline from the European Union.

GEORGE Osborne was under pressure last night to make sure Britain’s taxpayers do not have to contribute more than £4 billion to help bail out Portugal as fears grow that Spain could be next to seek a financial lifeline from the European Union.

The Chancellor used the widely-anticipated move by Portugal to justify the Coalition Government’s austerity programme, insisting he would not play “Russian roulette with Britain’s national sovereignty”.

Speaking to the British Chambers of Commerce annual conference in London, Mr Osborne said: “Today of all days we can see the risks that would face Britain if we were not dealing with our debts and paying off our national credit card.”

However, Ed Balls for Labour hit back and accused the Chancellor of “a desperate piece of scaremongering”. He said: “If anybody is playing Russian roulette with the British economy it is George Osborne taking a huge gamble now without any idea how it’s going to turn out. That may be good political lines but it is very bad economics.”

The Treasury made clear the UK was not planning to offer bilateral assistance to Portugal as it did with Ireland when it offered a £7bn loan. However, it confirmed it could be required to provide a loan of up to £4.4bn – 13.6% of the €37.5bn remaining in the EU “disasters fund” – as well as 4.5% of any IMF loan.