* Progress on Greek debt relief buoys European markets
* FTSE at 1-month high, up 0.7 pct at close
* M&S slumps after warning of short-term profit hit (Updates prices at close)
By Kit Rees and Sudip Kar-Gupta
LONDON, May 25 (Reuters) - Britain's top share index climbedon Wednesday to touch its highest level in a month, lifted bygains at major banks and oil companies, while retailer Marks &Spencer slumped after a disappointing trading update.
The blue-chip FTSE 100 index was up 0.7 percent at6,262.85 points at the close.
Banks rose across Europe after euro zone finance ministersunblocked 10.3 billion euros of new funds for Greece and gavethe country its firmest offer yet of debt relief.
"There is some good news for investors as it looks like theymay not have to face another summer of high volatility withrespect to Greece," said Naeem Aslam, chief market analyst at TFGlobal Markets UK Limited.
Royal Bank of Scotland led the gainers, rising 4.4percent, and peer HSBC Holdings was up 2.8 percent.
Oil companies rose as the price of oil edged towards $50 abarrel.
M&S slumped more than 10 percent, the worst FTSE 100performer in percentage terms, after warning of a short-term hitto profit as it pushes through a plan to turn around itsunderperforming clothing and homeware business.
"We still have concerns that the company will not be able toreverse the declines in general merchandise (GM) like-for-likesales," Cantor Fitzgerald analysts wrote in a note, keeping a"sell" rating on M&S shares.
Product testing firm Intertek was down 5.6 percent,hitting a one-month low after reporting softer organic growth.
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Mike Dolan, Markets Editor EMEA. (Editing by Toby Chopra and John Stonestreet)