Eurozone chiefs: Greece can wait till November

"We had no one advocating a default for Greece. Everything will be done to avoid that and it will be avoided," Jean-Claude Juncker, the chair of the eurogroup of states, said after the meeting.

The countries that employ the single currency will make a decision on handing over €8 billion in eurozone and IMF cash some time in October, he said, while the Belgian finance minister said that Athens has until mid-November before it runs out of cash.

"Greece told us that the funds will have to be made available during the second week of November. We reviewed the Greek plan and we will now wait for the final report from the troika since we have time to decide," Belgian finance minister Didier Reynders told reporters.

Until now, Greece has maintained that it would begin to be unable to pay its bills around the middle of October.

Juncker also hinted that private sector investors may have to up their expected haircut on the Greek debt they hold, in line with the demands of Germany but opposed by France out of fears for its banks, which are highly exposed to debt from the Hellenic Republic.

In July, eurozone leaders backed 21 percent write-downs on Greek bonds as part of a plan cobbled together by the International Institute for Finance, the global association of financial institutions. Berlin however has come round to the notion that Greece is simply unable to pay off the scale of its debts and that a more substantial haircut is necessary to prevent a disorderly default.

The ministers for the first time also moved into discussions over a possible massive expansion of the firepower of the European Financial Stability Fund. It is understood that options on the table include leveraging the rescue fund via the European Central Bank in a way that would not require endorsement by the parliaments of all 17 eurozone member states, an arduous process not in keeping with the schedule demanded by markets for crisis response.

"We need a more flexible and powerful EFSF as a financial firewall to contain contagion,” said Rehn, although none of the economy officials at the meeting would offer any further details than what is already the subject of speculation in the media.

However, in one major breakthrough, the eurozone chiefs finally managed to resolve the issue of Finland’s demand for collateral from Greece in return for its participation in the bail-out.

The ministers found a solution that still allows the country its collateral, but makes the terms so onerous that it is highly unlikely any other eurozone state will go down the same path.

Finland must make a payment of €1.4 billion to the permanent eurozone rescue fund to be set up in 2013, the European Stability Mechanism, while other states only need to deliver their sums over the course of five years. Helsinki will also receive a lower interest rate on its loans compared to the other states.