FRANKFURT: Central banks from Tokyo to London checked their ammunition yesterday in preparation for any turmoil from Greece's election, with the European Central Bank (ECB) hinting at an interest rate cut and Britain set to open its coffers.

Tensions were high about how to manage the euro zone's debt crisis - epitomised by Greece's bankruptcy and need for international aid - and a rare fight broke out between Germany and France, normally the glue that keeps the bloc together.

German Chancellor Angela Merkel criticised France's economic performance, effectively taking a swipe at Socialist President Francois Hollande who has called for more emphasis on economic growth and less on budget austerity.

The feeling of crisis was real. "We must do everything possible to prevent the euro zone from falling apart," Dutch Prime Minister Mark Rutte said on television.

ECB president Mario Draghi, one of many policymakers gearing up for trouble after tomorrow's vote in Greece, said his bank was ready to step in and fund any viable euro zone bank that gets in trouble.

He painted a picture of a deteriorating euro zone economy with no inflation danger - conditions for monetary easing.

"There are serious downside risks here," Draghi told the annual ECB Watchers conference in Frankfurt, two days before the vote that could set Athens on a path out of the euro zone and stoke turmoil in financial markets.

"This risk has to do mostly with the heightened uncertainty."

Japan's top financial diplomat Takehiko Nakao warned that authorities in Tokyo would respond to unwelcome currency moves as appropriate, a clear threat of intervention if investors seeking safety push the yen too high.

It was an echo of strong pledges from the Swiss National Bank on Thursday that it would do what it takes to protect the franc from soaring.

The Bank of England followed up on Thursday's joint announcement with the government of a £100 billion ($155bn) offer of loans to banks by saying it will start next week with a charge of just 0.75 per cent.

Officials from the G20 nations, whose leaders are meeting in Mexico next week, say numerous central banks are preparing to take steps to stabilise financial markets - if needed - by providing liquidity and prevent any credit squeeze.

European Council president Herman Van Rompuy convened a conference call yesterday with the leaders of Germany, France, Italy and Britain, officially to discuss preparations for the G20 summit, expected to be dominated by the euro zone debt crisis.

The focal point for all is the repeat general election in Greece, a knife-edge race that could be won by parties vowing to tear up the harsh economic terms that the European Union and International Monetary Fund imposed as conditions of a bailout for the near-bankrupt state.

Such an outcome could drive Greece into default and possibly out of the euro zone, a prospect that could undermine faith in the currency bloc and add to pressure on the finances of bigger economies such as Italy and Spain.

In a sign of growing strain between Europe's central powers, Merkel hit out at France in response to Hollande's proposals for joint euro zone bonds and a joint bank deposit guarantee scheme.

"Europe must discuss the growing differences in economic strength between France and Germany," Merkel said.

Responding to Hollande's call for more euro zone solidarity, she said Germany had wanted to give the European Court of Justice the power to reject national budgets that breach EU rules but others had objected. She meant France.