French PM says world 'on edge of abyss'

By Francois Murphy and Ralph Boulton

PARIS/LONDON, Oct 3 (Reuters) - French Prime Minister Francois Fillon said on Friday the world stood on the "edge of the abyss", gripped by a global financial crisis now threatening industry, trade and jobs worldwide.

Fillon's words echoed a growing sense of alarm sweeping EU capitals ahead of an expected U.S. Congressional vote on Friday on a $700 billion bailout plan for the financial industry. Approval is far from certain.

The House of Representatives shocked world markets on Monday by rejecting a previous draft, wary of popular anger over the housing market collapse that triggered the crisis and high risk financial ventures that collapsed under the burden.

Prime Minister Fillon, whose country is hosting an emergency summit of Italian, British and German leaders on Saturday, said only collective action could solve the financial crisis. He said he would not rule out any solution to stop any bank failing.

"The world is on the edge of the abyss because of an irresponsible system," Fillon said, alluding to widespread anger over past lax regulation of financial markets and excessive lending.

Fillon said President Nicolas Sarkozy would propose at the emergency meeting measures to unfreeze credit and coordinate economic and monetary strategies.

European Central Bank President Jean-Claude Trichet sounded an alarm on Friday's expected vote in the U.S. Congress.

"(U.S. Treasury) Secretary (Henry) Paulson's plan obviously must be passed," he told Europe 1 Radio.