Eurozone leaders agreed on a standby aid plan for debt-laden Greece late on Thursday, which combines bilateral loans from eurozone members and contribution from the International Monetary Fund (IMF).

"As part of a package involving substantial International Monetary Fund financing and a majority of European financing, euro area member states, are ready to contribute to coordinated bilateral loans," said a statement released by the leaders.

According to the statement, Greece could only draw on the aid fund as a last resort and under strict conditions.

"This mechanism, complementing International Monetary Fund financing, has to be considered ultima ratio, meaning in particular that market financing is insufficient," the statement said.

"We expect euro-member states to participate on the basis of their respective ECB capital key," it added.

The eurozone leaders said, "the objective of this mechanism will not be to provide financing at average euro area interest rates, but to set incentives to return to market financing as soon as possible by risk adequate pricing."

They further stressed that since the Greek government has not requested any financial support, "no decision has been taken to activate the below mentioned mechanism."

Greek Prime Minister George Papandreou hailed the deal as "very satisfactory" at a press conference held after the meeting of eurozone leaders.

(Xinhua News Agency March 26, 2010)