Brussels/Athens - Greek political leaders clinched a long-delayed deal on austerity measures required to secure a second bailout in two years but the country's sceptical lenders demanded more cuts and a parliamentary seal of approval before providing any aid.

European Union partners and the International Monetary Fund have been exasperated by a string of broken promises and weeks of wrangling over the terms of a 130-billion-euro bailout, with time running out to avoid a chaotic default.

Finance ministers of the 17-nation euro zone meeting in Brussels warned there would be no immediate green light for the rescue package and said Athens must prove itself first.

Jean-Claude Juncker, who chairs the Eurogroup, said the Greek parliament must ratify the package when it meets on Sunday and a further 325-million euros of spending reductions needed to be identified by next Wednesday, after which the currency bloc's finance ministers would meet again.

“Thirdly, we would need to obtain strong political assurances from the leaders of the coalition parties on the implementation of the programme,” Juncker told a news conference after several hours of talks in Brussels. “Those elements needs to be in place before we can take decisions.”

Facing elections as soon as April, the leaders have been loath to accept the lenders' tough conditions, which are certain to be unpopular with voters.

Greek Finance Minister Evangelos Venizelos flew to Brussels after all-night talks involving Prime Minister Lucas Papademos, leaders of the three coalition parties and chief EU and IMF inspectors left one sensitive issue - pension cuts - unresolved.

Papademos' office had said a final 300-million-euro gap was bridged on Thursday in talks with the troika of the European Commission, the European Central Bank and the IMF, and endorsed by the party leaders.

The Greek government called on the coalition parties to support the deal when it comes to parliament, saying the Brussels meeting showed they were only half way there.

“The first step is for parliament to approve it, showing political parties' commitment to the targets and the policies of the new economic programme. It's time all of us to assume their responsibilities. We need action, not words,” government spokesperson Pantelis Kapsis said in a statement.

The euro rose on news of a deal, which appeared to remove - at least for now - the risk of a hard default by the euro zone's most indebted country, which faces a major bond redemption on March 20. The risk premium investors charge for holding Italian and Spanish bonds fell.

However, IMF spokesperson Gerry Rice said talks would continue to finalise details, making clear no agreement had been concluded yet. He said managing director Christine Lagarde wanted assurances Greece would stick to the agreed policies whatever the outcome of looming elections.

Venizelos said Athens also had an outline deal with private creditors on a bond swap in which they would give up 70 percent of the value of their Greek bond holdings, reducing Athens' 350 billion-euro debt pile by about 100 billion euros.

“The draft agreement on private sector involvement to decrease the Greek debt burden is practically finalised, even if it will be formally approved as part of the overall package, I trust next week,” EU Economic and Monetary Affairs Commissioner Olli Rehn told reporters.

ECB President Mario Draghi said he was “quite confident” that all the components of a Greek debt deal would fall into place and hinted the central bank could provide indirect help without breaching a treaty ban on financing governments.

The measures will mean a big fall in the living standards of many Greeks, now in the fifth year of a deep recession. Deputy Labour Minister Yannis Koutsoukos, a socialist, resigned over a package he said would be “painful for working people”.

Greece's two major labour unions called a 48-hour strike for Friday and Saturday against the reforms.

“The painful measures that create misery for the youth, the unemployed and pensioners do not leave us much room,” secretary general of the ADEDY union, Ilias Iliopoulos, told Reuters.

“We won't accept them. There will be a social uprising.”

Earlier, Panos Beglitis, spokesman for PASOK socialists who are in coalition along with the conservative New Democracy party and far-right LAOS, said the minimum wage would be cut by 22 percent as part of efforts to make the economy more competitive.

Asked how the differences over pension cuts had been resolved, a government official told Reuters: “There will be cuts in other areas of public spending and we will see how we will minimise reductions in pensions.”

New Democracy leader Antonis Samaras defended the resistance put up by Greek political parties to deeper austerity and called for a change in policy, in comments that may buttress European partners' doubts about his commitment to the programme.

“When your country is faltering and its social cohesion is at risk, can the only antidote to the crisis be even higher unemployment and two more years of recession?” Samaras said in a televised address.

“We should show the Europeans that what is happening in Greece will soon spread to the rest of Europe if we do not change the policy of an endless austerity.”

But he also said the deal opened the way for a big cut in Greece's debt that would “give us hope once again”. - Reuters