BRUSSELS - Euro zone finance ministers sealed a deal for a massive new bailout of Greece in the early hours of Tuesday, several sources said.

'We have the essentials of the deal,' a European Union official said, indicating it covered both a write-down of Greek sovereign debt held by private creditors and a package of guarantees and loans also being put up by euro zone governments.

The euro immediately jumped against the dollar in Asian trading after finance ministers gave their green light to a 230-billion-euro (S$381.6 billion) financial lifeline, in exchange for strict surveillance of the Athens government over coming years.

The deal came after 12 hours of tense talks in Brussels, that saw Greek Prime Minister Lucas Papademos - a former European Central Bank No. 2 - act as go-between for ministers with negotiators for private creditors.

The deal will bring government debt in Athens down to '120.5 per cent' of gross domestic product (GDP) by 2020, a euro zone governmental source also told AFP.

This is just a fraction above the 120-per cent target set by the European Union and International Monetary Fund, and means a 5.5-billion-euro gap in funding was reached to bring it down from an estimated 129 per cent according to the latest analysis by international creditors.

The euro rose to US$1.3266 (S$1.6647), from $1.3185 immediately prior to the announcement from Brussels.

Sources earlier said that banks were readying to up their write-down by several percentage points, from the 50 per cent 'haircut' initially agreed by euro zone leaders in October.

National euro zone central banks also agreed to engage in their own write-down of Greek bonds.