After 12 hours of talks they agreed on a raft of measures to reduce Greek debt by 40 billion euros to 124 per cent of GDP by 2020.

Eurogroup President Jean Claude Juncker said: "This is not just about money. This is the promise of a better future for the Greek people and for the EU area as a whole. I admit however that it has been a very difficult deal. It required very significant efforts by each and every stake holder."

The agreement opens the way for a major aid instalment of up to 44 billion euros which ministers will formally approve on December 13

Reporting for euronews, James Franey said: "Greece will get its next slice of bailout cash in three instalments, but only if it ploughs on with agreed reforms. In particular the troika of international lenders wants to see changes to the Greek tax system if that money is to be released."

The debt reduction measures include cutting the interest rate on loans to Athens and returning 11 billion euros in profits from ECB purchases of Greek government bonds. Once a buy-back of Greek debt has occurred the IMF will pay its one-third share of the bailout.

"Certainly we wanted to make sure that Greece was back on track and was producing the actions necessary to that effect," explained IMF Managing Director Christine Lagarde. "The second thing the IMF wanted to make sure was that Euro partners were themselves taking the necessary actions to bring Greek debt on a sustainable path."