An emergency bailout of Ireland, which is looking increasingly likely today, could cost Britain billions of pounds.

Although Ireland continues to deny that it has asked for help, many analysts believe the country will have to tap a €60bn (£50bn) rescue fund set up by the European Union in May.

Under the terms of a deal agreed by Alistair Darling, the UK is liable for 13.6% of this fund. This means taxpayers could contribute as much as €8bn, depending on how the rescue package was structured.

The UK government declined to say how much an Irish rescue package could cost British taxpayers. "There has been no application [from the Irish government for emergency funding] and we won't speculate on it," said a spokesman for the Treasury this morning.

Miguel Ángel Fernández Ordóñez, the governor of the Bank of Spain, piled fresh pressure on Dublin today. "The situation in the markets in recent weeks has been very negative due in some way to the lack of a final decision by Ireland," said Ordóñez, who is also a member of the European Central Bank governing council.

"It's not me who should take a decision about Ireland, it's Ireland that should take the right decision at the right moment," he added.

A spokesman for Fine Gael, the opposition party, claimed today that the European Union had already intervened in the crisis. He predicted that a bailout will be hammered out during meetings between EU finance ministers this week.

Amid the uncertainty, the euro traded close to a seven-week low of 84.5p struck on Friday and the yield on Irish 10-year government bonds remained at crisis levels, trading at about 8.1%.

Fears that the financial crisis is entering a new phase also hit UK government debt, with British gilt futures tumbling against German bunds. The December gilt future was 26 basis points down at 122.11 – about 10 points ahead of the equivalent bund.

The scale of the eurozone debt crisis was underlined today when the EU statistics body Eurostat warned that Greece's budget deficit was even larger than thought. Eurostat reported that the Greek deficit in 2009 was 15.4% of its GDP, up from a previous estimate of 13.6%.

Having revised several years of data, Eurostat also said that Greece's deficit for the current year would be equal to 9.4% of GDP, missing the government's target of 7.8% of GDP.

Support for Ireland

Irish newspapers reported today that Ireland is considering asking for money for its banks via the EU's emergency fund.

While Ireland continues to deny reports it is negotiating a potential rescue from the EU emergency fund, it is locked in talks with other European governments over the strategy for tackling its debt crisis. The finance minister, Brian Lenihan, travels to Brussels for negotiations with other EU finance ministers tomorrow.

On Friday, the finance ministers from Europe's biggest economies, including Britain, pledged their support to the debt-laden country. David Cameron signed a joint statement giving an assurance that the EU would step in to guarantee 100% of Irish debts if the country is unable to tap international money markets for extra funding.

Dublin is resisting pressure to ask for help because the bailout terms would be punitive. Ireland would have to partially surrender sovereignty over its budget and could also be forced to increase its low corporation tax rate of 12.5%.

EU leaders have a total of €750bn at their disposal to shore up distressed member states. As well as the €60bn "community facility" agreed in May, eurozone governments have guaranteed €440bn in a financial stability mechanism, while the International Monetary Fund has pledged €250bn. Any Irish bailout is likely to come from the €60bn community facility. As the UK is not a member of the euro, it is not part of the €440bn mechanism fund.

Britain's support for the community facility is controversial as Darling took the decision on 10 May, four days after the general election and the day before David Cameron was invited to form the new government.