London shares extended their gains on Thursday as Greece appeared to soften its stance towards creditors to secure a debt deal.
The FTSE 100 Index rallied 83.82 points to 6574.52 as reports suggested that the latest Greek proposals could contain €12 billion in tax rises and cuts.
Analysts said creditors were likely to welcome the news, but noted that such reforms were greater than those rejected by Greek voters in last Sunday's referendum.
Connor Campbell at spread-betting firm Spreadex said: "If the €12bn reform plan reports are true, it’s going to be a tough sell back at home."
The International Monetary Fund (IMF) and the Federal Reserve backed debt restructuring for Athens, increasing pressure on other creditors to soften their stance.
Analysts said sanguine US Fed minutes on Wednesday reassured markets that a US interest rate rise won’t be coming this year, citing Greece and China as ongoing cause for concern.
Although Wall Street closed in the red, Asian markets were positive on the Greek hopes and some stabilisation in China, which was buoyed by upbeat inflation data.
Back in London, the Bank of England (BoE) kept interest rates on hold at 0.5%. Economists said the move was not a surprise.
Howard Archer at economic researchers IHS Global Insight said the Bank was unlikely to have hiked rates so soon after the government's Budget on Wednesday.
He added: "Wariness over just what will happen with Greece and how badly the rest of the Eurozone could be hit, with potential knock-on effects for the UK, was also a very compelling reason for the BoE to sit tight."
Primark owner Associated British Foods (LON:ABF) was 96p tastier at 3027p on strong European trading.
Gaming group Bwin.Party (LON:BPTY) ticked up 2.2p to 101.3p on news of a £900mln takeover offer from Sportingbet operator GVC Holdings.
Barratt Developments (LON:BDEV) was 9.5p higher at 604p as it forecast a 45% rise in annual profits.
Shares in 7digital (LON:7DIG) bounced 1.62p or more than 10% to 17p on news that a switch in focus to technology licensing was resulting in higher margin earnings.
Floor covering retailer Carpetright (LON:CPR) bristled up 4p to 576p as Shore Capital retail analyst Clive Black upped his 2015/16 profit forecasts.
News of the start of drilling of a hole at the Cascabel copper-gold project in northern Ecuador failed to impress investors in SolGold (LON:SOLG), whose shares fell 0.1p to 2.3p.
Infinis Energy (LON:INFI) sank 20.25p to 159.75p as the wind farm group forecast a profit hit from the Government's decision to discontinue the Climate Change Levy (CCL) exemption for renewable generators from next month.