European shares rose on Friday, recording their biggest weekly gain since late 2008 on hopes euro zone leaders were coming together to find solution to the euro zone debt crisis.

The STOXX Europe 600 Banking Index <.SX7P> rose 4.2 percent after the French President, Nicolas Sarkozy, said he and German Chancellor Angela Merkel would meet on Monday to outline joint proposals to put to a December9 EU summit, seen as make-or-break for the 12-year-old single currency.

Euro zone lenders, which own the largest share of the bloc's sovereign debt and had been battered by the market in recent months, rose as much as 5.1 percent, with Germany's Commerzbank and France's BNP Paribas both up around 10 percent.

We're many miles away from a resolution of this situation in Europe, so we have to be very wary about this sort of moves, Richard Jeffrey, chief investment officer at Cazenove Capital, said.

What you can say is that the move you have seen this week indicates a strong level of underlying support for equities (and) on valuation grounds that's certainly justified, added Jeffrey, who helps manage around 15 billion pounds.

The FTSEurofirst 300 closed 0.9 percent higher at 984.41, bringing the weekly gain to 8.4 percent, after losing around 21 percent of its value since July.

(Reporting By Francesco Canepa)