Greek political leaders have reached agreement on €11.5 billion (£9.1bn) of austerity cuts demanded under its bailout.

The move is due to open the way for a deal with foreign lenders within the month, government officials said.

Greek Socialist leader Evangelos Venizelos said Greece must demand more time to achieve targets under its bailout package, but added he was temporarily setting aside his request in the interest of the country. Greek party leaders had been struggling to find agreement on the cuts for weeks, with Mr Venizelos insisting on spreading them out over four years instead of making them by 2013 and 2014 as currently required under the terms of the bailout.

Officials close to Prime Minister Antonis Samaras said he had made clear to his political partners Greece had no choice but to agree to the measures now and renegotiate later.

"He [Samaras] told them any other decision would lead Greece to isolation and may mean its exit from the euro," one aide claimed last night.