Eurozone chiefs moved early today towards closing a deal for a massive new bailout of Greece as leaders negotiated with banks on the key write-down of Athens' massive debt. After months of acrimonious debate, markets rose as all sides expressed confidence that an agreement would be found to greenlight a 230-billion-euro (USD 300 billion) financial lifeline, in exchange for strict surveillance of the Athens government over coming years.

That despite grinding negotiations with private creditors on the sidelines of talks among finance ministers in Brussels principally over a 5.5-billion-euro gap needing to be filled if Germany and the Netherlands especially are to get the agreement past their national parliaments. Greece's Prime Minister Lucas Papademos and Finance Minister Evengelos Venizelos took turns scuttling in and out of talks with the representatives of the banks, officials said.

A mini-breakthrough was reached just after midnight (2300 GMT Monday) when national eurozone central banks agreed to engage in their own write-down of Greek bonds. "There's a long way to go yet, but we wouldn't still be in there if we didn't think we would get there tonight," said one eurozone governmental source. Greece, Germany, the IMF and the head of the Eurogroup of finance ministers, Jean-Claude Juncker, each maintained that a deal could be reached during the closed-door talks.

European Union and International Monetary Fund partners have set a target of reducing Greek debt levels to 120 percent of gross domestic product (GDP) by 2020, still steepling high but down from around 160 percent at present. The 5.5-billion-euro gap comes about because the latest analysis suggests that even with a bailout, Greek total debt would only fall to 129 percent of GDP.

Venizelos said on arrival that he was "optimistic" of a deal, signalling "a long period of uncertainty coming to a close today -- a period that benefited neither the Greek economy, nor the euro area overall." A "confident" Wolfgang Schaeuble, his German counterpart,seemed to echo the sense that an agreement was in the making late-afternoon, while IMF chief Christine Lagarde also praised Athens' "great efforts" to overhaul its economy.

But Dutch Finance Minister Jan Kees De Jager signalled a long night ahead when he demanded that the EU and the IMF take "permanent" control of decision-making over revenues and public expenditure in Greece.