European stocks rebounded slightly Wednesday, despite heavy losses in China, on optimism over the Greek crisis after European leaders slapped Athens with a deadline to submit new bailout reform proposals.

British equities also forged higher ahead of finance minister George Osborne's latest budget, which is set to deliver more austerity.

London's benchmark FTSE 100 index of top blue-chip companies added 0.67 percent to 6,475.0 points at midday, before a budget due at 12:30 pm (1130 GMT).

Frankfurt's DAX 30 gained 0.35 percent to 10,714 and the CAC 40 in Paris rose 0.63 percent to 4,633.40 compared with Monday's close.

"European markets have tiptoed higher as the eurozone lays down the law, indicating that Greece must fall into line by Sunday or get ready to exit the currency union," said analyst Chris Beauchamp at trading firm IG.

"Investors can hardly be blamed for treating the news with caution, given Greece’s inability to deliver the goods at previous crucial points in this crisis."

In foreign exchange on Wednesday, the euro advanced to $1.1041 from $1.1011 late in New York on Tuesday.

- 'Hopes of progress' -

 Eurozone leaders have ordered Greece to submit detailed bailout reform proposals by Thursday, while warning they had drawn up contingency plans in case it does not meet expectations.

All 28 European Union leaders will then examine the plans on Sunday in a make-or-break summit that could save Greece's moribund economy, or leave it to its fate.

"European equities (are) positive (which) suggests hope of progress before the weekend deadline," noted Mike van Dulken, head of research at Accendo Markets.

The eurozone's bailout fund said Greece had formally submitted a request for a new aid programme, just days before the deadline.

Athens meanwhile raised 1.6 billion euros ($1.8 billion) in a sale of six-month treasury bonds at a rate of 2.97 percent, unchanged from the last issue a month ago.

Back in London, Britain's Barclays saw its share price surge by more than three percent at one stage after the scandal-hit banking giant sacked its chief executive Antony Jenkins.

In recent years, Barclays has been blighted by a series of scandals, facing vast fines over its role in forex and Libor rigging affairs.

Barclays management has "concluded that new leadership is required" to accelerate an overhaul of the beleaguered group, it revealed in a surprise statement.

Jenkins has left the group with immediate effect, a spokesman confirmed.

Barclays shares later stood at 258.10 pence, up 2.36 percent from Monday.

"The big corporate news ... has come from Barclays with word that its chief executive has been fired -- slow progress in implementing the bank's new strategy is being cited and the shares are rallying hard as a result," said Trustnet analyst Tony Cross.

 

- Asia selloff gathers pace -

 

Across in Asia, meanwhile, equities tumbled as a collapse in Chinese shares began to contaminate other markets in the region.

Shanghai plunged 5.90 percent, despite Chinese leaders announcing fresh measures to staunch a correction that has wiped trillions off the country's markets.

Hong Kong tanked 5.84 percent to 23,516.56 -- its lowest close since the start of January.

Tokyo sank 3.14 percent, Seoul slipped 1.18 percent and Sydney retreated 2.01 percent.

"China's stock market rout is now spreading to other financial markets, creating a sweeping sense of panic and liquidity crunch," said Zheng Ge, an analyst at Wanda Futures Co.

Shanghai is down more than 30 percent from its closing peak on June 12, when it had risen by more than 150 percent in 12 months in a borrowing-fuelled frenzy enhanced by hopes for economy-boosting government measures.