Investors reacted negatively yesterday to Argentina's latest plan to escape its economic crisis, saying it raised more questions than it answered.

The country's bonds again plunged, pushing the yields over US Treasuries up to 25 per cent, its highest level since JP Morgan began tracking the value in 1993.

Late on Thursday, the government unveiled a plan to cut its interest payments by $4 billion (€4.43 billion) a year and reduce taxes to help restart growth in the economy after 40 months of recession.

But with few details available on the effort to restructure its $132 billion debt, investors struggled to ascertain whether it constituted an outright default.

Some analysts said the proposal to offer new bonds, paying 7 per cent interest and backed by guarantees in exchange for existing bonds, would be unacceptable to investors.

"It is unlikely that bondholders would agree to a comprehensive write-down voluntarily," said Lacey Gallagher, an analyst at Credit Suisse First Boston, the investment bank.

There was also widespread confusion about whether Argentina would be seeking international support to restructure its debt.

Announcing the plan, President Fernando de la Rua said Argentina would not be seeking any further international aid.

However, a presidential decree published shortly afterwards authorised officials to obtain guarantees that could be offered to international investors in return for accepting lower interest payments.

So far, neither the US nor the International Monetary Fund has indicated any intention to provide further assistance following the failure of two multi-billion-dollar aid packages in the past year to pull the country out of crisis.