European equities bounced back on Wednesday after euro zone members gave Greece until the end of the week to come up with a proposal for sweeping reforms to secure new aid and avoid crashing out of the euro.

Barclays was the FTSEurofirst 300 index's top gainer, up 3.3 per cent, after the British lender surprised markets by announcing a search for a new chief executive to help accelerate strategic change and boost shareholder returns.

"Markets are up on the realisation that this weekend there will probably come an end to the Greek saga, one way or another. Markets are probably priced for a Grexit, but one where contagion may be limited," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels.

"In the meantime, commodity-related shares are in a downtrend, pressured by the sharp sell-off in the Chinese stock market. This will eventually lead to a massive buying opportunity, but it is clearly too early to jump back in."

The euro zone's blue-chip Euro STOXX 50 index was up 1.2 per cent by 0809 GMT, while the pan-European FTSEurofirst 300 index rose 0.5 per cent.

Britain's FTSE, Germany's DAX and France's CAC gained 0.6 to 1.1 per cent, following an emergency summit on Greece in Brussels late on Tuesday.

European Central Bank Governing Council member Christian Noyer said a crisis meeting of EU leaders on Sunday is "really the final deadline" for Greece to reach a deal with creditors or face economic collapse.

But EU Economics Commissioner Pierre Moscovici said an agreement between Greece and its euro zone partners was still possible.

The STOXX Europe 600 Basic Resources Index fell 1.2 per cent after stocks in China, the world's biggest metals consumer, slumped further. Chinese shares have lost about 30 per cent of their value since mid-June, a new blow to the country's already slowing economy.

In Britain, Finance Minister George Osborne, fresh from May's election victory, will say on Wednesday how he plans to reshape the economy by chopping welfare spending, easing the tax bill for workers and tackling challenges facing the recovery.

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