Eurozone agrees bailout shake-up

European leaders have agreed a restructuring of a financial bail-out fund in a bid to solve the debt crisis which is stalking the zone.

Eurozone ministers bowed to German demands to renegotiate the time frame for contributions to the fund, at a Brussels summit.

However the situation with Portugal, which rejected suggestions it needed a bail-out, remains top of the agenda.

The eurozone debt deal follows months of negotiations.

"We decided a comprehensive package of economic measures... Today almost all the strands of this enterprise have come together," European Council President Herman Van Rompuy said.

The new plan provides for the creation of a permanent fund, the European Stability Mechanism, to help troubled eurozone countries. It will be launched in 2013.

A major sticking point was the speed with which countries had to pay cash into the 700bn-euro (£615bn) fund.

The agreement requires 80bn euros of cash provided by eurozone countries in five equal annual instalments. There will be a further 620bn euros in guarantees.

There had been expectations that the two-day summit in Brussels would agree a resolution over rescuing Portugal's stricken economy.

But Portuguese ministers said they had no intention of following Greece and the Irish Republic in tapping the bail-out fund.

Privately, eurozone ministers believe it is only a matter of time before Lisbon asks for aid.