Britain's FTSE climbs as banks and miners rise, M&S slumps

(ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report for more details)

* Progress on Greek debt relief buoys European markets

* FTSE near 1-month high

* M&S slumps after warning of short-term profit hit

By Sudip Kar-Gupta

LONDON, May 25 (Reuters) - Britain's top shares index climbed on Wednesday towards its highest level in nearly a month, lifted by gains at major banks and miners, although retailer Marks & Spencer (Other OTC: MAKSF - news) slumped after a trading update.

The blue-chip FTSE 100 index was up 0.5 percent at 6,251.47 points, near its highest level in around a month.

Banks across Europe rose after the euro zone gave Greece its firmest offer yet of debt relief in what finance ministers called a breakthrough deal, under which the IMF will return to taking part in the bailout for Athens.

"There is some good news for investors as it looks like they may not have to face another summer of high volatility with respect to Greece," said Naeem Aslam, chief market analyst at TF Global Markets UK Limited.

Mining stocks also climbed as copper prices rose.

However, M&S slumped 8 percent, making it the worst-performing FTSE 100 stock in percentage terms.

M&S warned of a short-term hit to profit as it pushes through a plan to turn around its underperforming clothing and homeware business.

"We still have concerns that the company will not be able to reverse the declines in general merchandise (GM (NYSE: GM - news) ) like-for-like sales while the rate of growth in general merchandise gross margins is likely to slow," Cantor Fitzgerald analysts wrote in a note, keeping a "sell" rating on M&S shares.

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Mike Dolan, Markets Editor EMEA. (Editing by Raissa Kasolowsky)