The leaders of Germany, France and Italy have vowed there will be no informal talks or deals made with Britain before it formally tells Brussels it is leaving the European Union.

Key points: Britain told it must activate Article 50 before talks on future EU ties

Britain told it must activate Article 50 before talks on future EU ties European bank stocks post worst two-day fall on record

European bank stocks post worst two-day fall on record Corbyn vows to "reshape" his opposition cabinet

The warning by the EU's three most populous continental nations means Britain must first take the plunge of invoking Article 50 to leave the union before being able to negotiate its future trade and other ties with the bloc.

German Chancellor Angela Merkel — hosting French President Francois Hollande and Italian Prime Minister Matteo Renzi in Berlin — said "we agreed on this, that there will be no informal or formal talks on the exit of Britain until an application has been filed to leave the European Union".

British Finance Minister George Osborne had said earlier that his country should only activate Article 50 when it has a "clear view" of how its future relations with the bloc would look.

The scrutiny of the formalities of leaving the EU came as a potential candidate for the British prime ministership published a letter in the Daily Telegraph raising the prospective of a new referendum.

Health Secretary Jeremy Hunt said Britain could hold a second referendum on European Union membership if it could broker a deal with the EU to allow full control of its borders.

Mr Hunt said Prime Minister David Cameron's successor should be given a chance to negotiate with Brussels before Britain activated Article 50.

"So before setting the clock ticking, we need to negotiate a deal and put it to the British people, either in a referendum or through the Conservative manifesto at a fresh general election," Mr Hunt said.

Merkel calls for fresh look at EU

Ms Merkel has vowed that the remaining 27 members would push on with the European project, saying "we will suggest to our [EU] colleagues that we should put in place a new impulse … in the coming months".

Speaking on the eve of a two-day Brussels summit, she called for unity and urged a new collective push for cooperation in areas that included "defence, growth or jobs and competitiveness".

Ms Merkel stressed that "there must be no period of uncertainty" that is prolonged, and that the EU must counter "centrifugal forces" in other countries pushing to leave the union.

Mr Hollande, somewhat more bluntly, urged Britain to "not waste time" in triggering the process to leave the EU, arguing that it was to all parties' benefit to move forward quickly.

"Being responsible means not wasting time — not wasting time in dealing with the question of Britain's departure, not wasting time too in putting in place the new stimulus that we need to give to the European Union, that is to say, the 27 members," he said.

"Because nothing is worse than uncertainty. Uncertainty generates often irrational behaviour. Uncertainty also leads financial markets to act irrationally."

UK's AAA rating slashed

European shares continued to be pummelled on Monday, with banks making their biggest two-day loss on record.

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Europe's bank stocks index fell 7.7 per cent, wiping out more than one-fifth of its value in two days and ending just a handful of points above lows reached at the height of a eurozone debt crisis at the end of 2011.

Ratings agency Standard & Poor's added to the pain, stripping Britain of its last remaining top-notch credit rating.

The UK's rating was slashed by two notches from AAA, and Standard & Poor's warned more downgrades could follow.

Mr Osborne said the British economy was strong enough to cope with the volatility caused by the referendum, the biggest blow since World War II to the European goal of forging greater unity.

But his words failed to halt the fall of sterling, which later sank to its lowest level against the US currency for 31 years, continuing the slide that began last week.

Parliament should not block Brexit, Cameron says

Meanwhile, Mr Cameron sought to calm fears over the fallout of the referendum, and said there should be no attempt in Parliament — where a majority of members, like him, argued that Britain should stay in the EU — to block Britain's departure.

Analysis: EU clear on message By London bureau chief Lisa Millar "Over to you, Britain." That was the message from three of the most powerful leaders in the European Union as they met one day before British Prime Minister David Cameron is due in Brussels for what are bound to be tense talks. Germany's Angela Merkel, France's Francois Hollande and Italy's Matteo Renzi spoke in Berlin, standing shoulder to shoulder, sending the clear signal that the EU is okay without the UK. It's powerful and strong. The trouble is, the EU is under enormous pressure, and the leaders will be trying to contain the damage that could spread from the UK's Brexit decision. Ms Merkel, as the EU's longest serving leader, is again carrying the heavy load. She has urged patience to those, like European Commission president Jean-Claude Junker, who thinks the UK has to be responsible for the consequences of the vote. Mr Renzi is worried about jittery markets and had hoped negotiations would start immediately. But Mr Cameron will arrive in Brussels with no timeline set for Britain's departure from the EU. And in fact, Europe's leaders have ruled out any formal or informal talks until a direct request is made by the UK to exit the EU. So what then will be discussed at these talks? Brexit is top of the agenda, and Mr Cameron will be invited to explain how Britain intends to leave this 40-year arrangement and just what kind of relationship the UK wants with the EU. But he will not be the leader overseeing the exit. It is all bound to be a little awkward and a lot complicated. At least Mr Cameron does not have to stay for the whole two-day session. For the first time, the UK will be excluded from the second day of talks — something for which Mr Cameron is probably grateful.

"I am clear, and the cabinet agreed this morning, that the decision must be accepted," Mr Cameron said in his first words in Parliament, which faces a public petition for a new referendum, since last week's vote.

Opposition leader Jeremy Corbyn condemned "internal manoeuvring" after more than half his top team resigned in barely 24 hours, but insisted he would not go himself.

Twenty members of the Labour leader's shadow cabinet have so far resigned in a rolling series of departures triggered by Mr Corbyn's weekend sacking of his foreign affairs spokesman Hilary Benn.

The veteran socialist, widely blamed for failing to rally the party's core working-class vote base to support the Remain campaign, said the country was divided after last Thursday's shock vote.

"The country will thank neither the benches in front of me, nor those behind, for indulging in internal … manoeuvring at this time," Mr Corbyn said.

Earlier, Mr Corbyn said he would not betray the trust of the party members who elected him only last September, and vowed to "reshape" his shadow cabinet.

"I regret there have been resignations today from my shadow cabinet," he said in a statement.

"But I am not going to betray the trust of those who voted for me — or the millions of supporters across the country who need Labour to represent them.

"Those who want to change Labour's leadership will have to stand in a democratic election, in which I will be a candidate."

AFP/Reuters