European heads of state called on Saturday for modification of international accounting standards allowing some assets to be reclassified and avoid being subject to fair value rules.

However, the meeting, hosted by French president Nicholas Sarkozy and attended by Gordon Brown, failed to call for a complete suspension of fair value despite suggestions earlier in the week that it was the favoured option of the French.

The International Accounting Standards Board announced on Friday, before the summit, that it was willing to look at reclassification and would do so at a meeting next week. It may well have been the move that headed off a full frontal attack on what has become a highly controversial accounting principle.

Reclassification is not being viewed as a surrender by the IASB because the board's own statement anticipates that it will happen only on rare occasions. The board has also committed itself to looking at anti abuse measures, another indication that reclassification would be strictly controlled.

Before the summit there was a round of intense last minute lobbying on Friday including a direct call from the Association of British Insurers to leave fair value alone.

Saturday’s statement, written jointly between Britain, France, Germany and Italy, said: ‘We will ensure that European financial institutions are not disadvantaged vis a vis their international competitors in terms of accounting rules and of their interpretation. In this regard, European financial institutions should be given the same rules to reclassify financial instruments from the trading book to the banking book including those already held or issued.

‘We urge the IASB and FASB to work quickly together on this issue in accordance with their recent announcement.’

This morning Tory leader David Cameron has reiterated his dislike for fair value writing in the Financial Times: ‘In the current crisis mark to market accounting is exacerbating a self fulfilling cycle of falling asset values and restricted lending. Regulators should work with their European counterparts to address this difficult issue.’