David Cameron has issued an ultimatum to the Greek people that fresh elections must decide once and for all whether the country stays in the eurozone.
The Prime Minister insisted failure to provide clarity could prove disastrous for the world economy.
The message came as his Cabinet colleague Ken Clarke said the European banking system was already "in tatters".
Mr Clarke warned that Britain was "heavily exposed" to potential problems and could be among the next targets for market speculation.
Deputy Prime Minister Nick Clegg also criticised the lack of leadership on the eurozone crisis, raising fears of a rise in extremism and civil unrest unless it was addressed.
Mr Cameron, 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 to 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.