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Eurozone finance ministers have agreed to throw an initial 30bn euro (£23.7bn) lifeline towards Spain's troubled banks.
The announcement was made late into a summit in Brussels which had appeared doomed to offer little amid talk of disagreements on pre-conditions and the legality of using the bloc's rescue fund to essentially bail out banks rather than Governments.
But the funds may have been enough to ease immediate pressure on Spain's borrowing costs, 24 hours after the country's 10 year bond yield hit the 7% danger zone again - the level seen as unsustainable in the long term.
After nine hours of talks it was confirmed 30bn euros of the 100bn already agreed in principle would be available by the end of the month.
The finance ministers would return to Brussels, eurogroup chief Jean-Claude Juncker said, on July 20 to finalise the agreement, having first obtained the approval of their governments or parliaments.
As part of the deal, finance ministers from all 27 European Union countries are on Tuesday expected to approve a one-year extension, until 2014, of Spain's deadline for achieving a budget deficit of 3%.
There will be specific conditions for specific banks, and the supervision of the financial sector overall will be strengthened, Mr Juncker said.
"We are convinced that this conditionality will succeed in addressing the remaining weakness in the Spanish banking sector," he claimed while also confirming it would include a cap on executive salaries at the banks which receive bailout funds and a ban on bonuses.
The bailout total will likely not be known until September when individual examinations of different Spanish banks have been completed but the expectation in Brussels was that Spain would need the full 100bn euros.
