Private sector acceptance of a 50 per cent discount on their Greek debt holdings should be very high, the managing director of the Institute of International Finance said today.

Euro zone leaders struck a deal with private banks and insurers for them to accept a voluntary 50 per cent loss on Greek government bonds under a plan to lower the country's debt and try to contain the two-year-old euro zone crisis.

"We believe it (take-up) is likely to be very, very high," Charles Dallara, who led negotiations with EU officials on behalf of banks and private sector bond holders, said.

Mr Dallara told a news briefing hours after talks he was confident about the breadth of acceptance and had every reason to believe chief executives and other investors would support the deal.

"All parties recognised not only that the future of Greece but also the future of Europe, and the future of the world economy, was at stake," he added during a briefing in Brussels.

He said the fact the deal is voluntary was critical.  "An involuntary approach could have created true calamity. Greece could have been closed out of the capital markets for a generation ... and Europe could have fallen into recession," Mr Dallara said.

He said the specifics still needed to be negotiated, notably the "credit enhancements" or sweeteners of €30 billion.

The aim is to complete negotiations on the package by the end of the year, so Greece has a full, second financial aid programme in place by 2012.

"We look forward to early implementation of this," Mr Dallara said.

He believed that private sector bond holders would not be faced with a number of options, as was the case when they initially accepted a 21 per cent Greek debt haircut in July.

"I think it will be simpler ... with a straight exchange," Mr Dallara said.

Reuters