Leaders in Athens and Berlin wrangled publicly over how to deal with Greece’s plea for further assistance as fears of a renewed eurozone recession mounted yesterday.

An index of business activity in the single currency area showed a seventh consecutive monthly contraction and an accelerating decline in output from Germany, the main engine of eurozone growth.

Markit Economics, which compiled the purchasing managers’ index, said the readings would be consistent with a fall of 0.5 per cent or 0.6 per cent in eurozone gross domestic product in the third quarter. GDP for the 17-country area shrank 0.2 per cent in the second quarter. “It would take a substantial bounce in September to change this outlook,” said Rob Dobson, a senior economist at Markit.