Greece’s international creditors are considering an appeal to the French and German leaders to break a deadlock in negotiations over the size of the losses to be taken by banks and other bondholders as part of a €100bn deal seen as crucial to bringing the country’s debt under control.

The move to involve German chancellor Angela Merkel and French president Nicolas Sarkozy comes after restructuring talks with official investors broke down on Friday raising concerns that Greece was moving closer to becoming the first developed country in more than 60 years to default on its debt.

In a sign of urgency, Guido Westerwelle, German foreign minister, flew to Athens yesterday for talks about the so-called private sector involvement (PSI) negotiations with Greek premier Lucas Papademos.