Greece was closing in on an initial deal with private bondholders yesterday that would prevent it from tumbling into a chaotic default but lose investors up to 70pc of the loans they have given to Athens.
Any agreement will be followed up by technical talks over the weekend.
Private bondholders would most likely incur a real loss of 65 to 70pc, with the new bonds having a 30-year maturity and offering a progressive coupon, or interest rate, averaging out at 4pc, a banking official close to the talks said.
Cash-strapped Greece is fast running out of time as it pushes to wrap up an agreement by Monday, paving the way for a fresh injection of aid before €14.5bn of bond repayments fall due in March.
"There could be a pre-agreement tonight, but technical discussions with the lawyers will likely continue over the week-end and next week," another source close to talks said, adding that involving the ECB in the deal was also discussed.
"We expect them to make an effort as well. It could be through a special deal, as you would expect for a body like the ECB," the source said.
After a breakdown in talks last week over the coupon, or interest payment, that Greece must offer on its new bonds, raised fears of a disastrous bankruptcy, the two sid- es resumed talks on Thursday.
Charles Dallara, who negotiates in the name of the private bondholders through the International Institute of Finance, was due to meet with senior Greek officials late in the day, Finance Minister Evangelos Venizelos said, after concluding a first round of talks in the morning.
In a carefully choreographed series of meetings, senior eurozone finance ministers will hold a conference call and Prime Minister Lucas Papademos will meet chief EU, IMF and ECB inspectors before resuming talks with Mr Dallara.
Greece needs to have a deal in the bag before funds are doled out from a €130bn rescue plan that the country's official lenders, the European Union and the IMF, drew up in October.