Leaders of the 15 eurozone countries plus Britain are to gather in Paris to announce a new package of measures to protect their banks from the global financial crisis.

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President Nicolas Sarkozy, the current president of the European Union, was to host first Britain's Prime Minister Gordon Brown and then his 14 colleagues from the single-currency bloc in the Elysee Palace.

On Friday, Sarkozy prepared for the meeting by holding talks with German Chancellor Angela Merkel, after which they promised to consult with the other leaders before unveiling a plan to restore confidence to the markets.

No details have yet been released about the proposals, but there were signs that the 15 were leaning towards a policy already adopted in Britain under which the state guarantees inter-bank lending and buys stakes in banks.

London hopes this voluntary part-nationalisation, which has been accepted by some of its biggest institutions, will unfreeze capital and restore confidence after the worst week on world stock markets since the crash of 1929.

Britian included in talks

Britain is not part of the eurozone, but Sarkozy said he wanted to meet Brown to "maximise coordination".

The French leader will hold talks with Brown at 3:30 pm (0030 Monday AEDT) and the other leaders will arrive at 5:00 pm (0200 AEDT).

Afterwards, Sarkozy will chair a news conference alongside the president of the European Commission Jose Manuel Barroso, eurozone chairman Jean-Claude Juncker and the governor of the European Central Bank Jean-Claude Trichet.

At Friday's meeting in Colombey-les-deux-Eglises, late French president Charles de Gaulle's home village and final resting place, Sarkozy and Merkel promised that Europe's response would be closely coordinated.

"We are analysing the crisis together. Germany and France have perfectly identical views on the consequences to take from that for the short, medium and long term," the French leader said.

Merkel agreed Paris and Berlin were "on the same path as regards putting in place a concerted and coherent reaction for the eurozone" but noted that within this there was "naturally room for manoeuvre for each member state".

"We are aware that state interventions are necessary because uncontrolled markets are not able to surmount these problems," she added, in a signal that Germany has moved beyond its initial wariness about large-scale intervention.

World economy rocked

In recent weeks, the discovery that many banks were holding large portfolios of "toxic assets" in the form of risky sub-prime US mortgages repackaged as safe-looking financial instruments has rocked the world economy.

The US banking giant Lehman Brothers collapsed and European governments have been forced to step in to recapitalise and in some cases partly nationalise fragile institutions.

Iceland has nationalised its three main banks.

The British response has been to set aside STG50 billion ($A125.13 billion) pounds of taxpayers' money to buy into banking stocks and to guarantee the safety of inter-bank lending, which has ground to a halt.

Washington has now announced a similar plan, and reports in the German press suggest Merkel will follow suit. French Finance Minister Christine Lagarde said France would not need to do the same, but predicted other countries would.

Sarkozy and Merkel also favour tighter market regulation, and the French leader has called for an international summit that would rethink the whole basis of the international laws governing the global economy.