Eurozone debt deal unveiled

European leaders have hammered out a "three-pronged" deal aimed at resolving the region's crippling debt crisis.

The leaders said private banks holding Greek debt had accepted a loss – or haircut – of 50 per cent.

Banks must also raise more capital to protect them against losses resulting from any future government defaults.

The deal is aimed at preventing the crisis spreading to larger eurozone economies like Italy, but the leaders said work still needed to be done.

It also approved a mechanism to boost the eurozone's main bailout fund to about 1tn euros (£880bn).