One of the world's leading credit-rating agencies has said that it may carry out an unprecedented mass downgrade of European countries if regional leaders fail to reach an agreement on how to solve the debt crisis in a summit later this week.

The ratings agency Standard & Poor's on Monday placed the ratings of 15 eurozone countries, including top-rated Germany and France, on "credit watch negative," meaning they could be downgraded within three months.

European leaders have hit back, with the head of the Eurozone finance ministers calling Standard and Poor's decision unfair and over the top.

Paul Brennan reports from London.