Cameron Holds First Meeting With Hollande

David Cameron has said his first face-to-face meeting with the French President was "very good", as world leaders start arriving at the G8 summit in the US.

Speaking at a joint news conference with the newly-elected Francois Hollande, the Prime Minister said: "President Hollande and I have had a very good meeting - we have reaffirmed the importance of the strong relationship between Britain and France."

Earlier this year, Mr Cameron snubbed the socialist presidential candidate when he visited London - but today said he had invited Mr Hollande to visit the UK "soon, to discuss all of the issues that are very much on our joint agenda."

Topics discussed at the meeting included defence, Afghanistan, Syria, Libya and the economy, Mr Cameron said.

"We've discussed the economic challenges that we face and we both want to see stability in international markets," he said.

"We both want to see countries deal with their deficits and we both want to see economic growth, and I know we'll be having many more discussions about this, obviously at the G8 and in the meetings that we have in the European union next week and in subsequent meetings."

Speaking ahead of the talks with Mr Hollande, who swept to power on a promise of putting growth before austerity, the Prime Minister insisted the pair would find common ground.

"There is no conflict between austerity and growth - you need to have a strong deficit reduction programme in order to get growth," Mr Cameron told Sky's Adam Boulton.

"President Hollande believes that and I believe that."

Mr Cameron said the tresident was not proposing extra spending and actually wanted to balance the books quicker than the UK Government was planning.

"Indeed the French plan to balance their budget actually happens faster than the British plan," he said, adding: "I am sure we will find many common agendas."

One issue over which the two leaders were likely to disagree, however, is a Europe-wide financial transaction tax, supported by Mr Hollande.

The Prime Minister issued a blunt warning about the measure, which he said would not be supported by Britain.

"On the financial transaction tax I'm very clear: we're not going to get growth in Europe or in Britain by introducing a new tax that would actually hit people as well as financial institutions," Mr Cameron said.

"I don't think it's a sensible measure, I will not support it."

The G8 talks are expected to be dominated by the eurozone crisis and the threat posed to world economies, international currencies and markets by the financial collapse and political vacuum in Greece.

Before the summit began, Mr Cameron insisted Britain is in a good economic position.

"In Britain we have the advantage of having our own currency, our own central bank, a strong Government with a strong plan to get the deficit down, and taking strong action across the board to encourage growth," he said.

The Prime Minister has insisted he will do "whatever it takes" to protect the UK from the fallout from the Greek crisis - but said the coalition's deficit reduction plans would stay.

After the G8 gathering at the US President Barack Obama's country retreat at Camp David, Mr Cameron will attend a Nato summit in Chicago.