Breathing space for Greece?

"There will not be a 'Grexit'," said European Commission head Jean-Claude Juncker, referring to the fear that Greece would have to leave the euro.

"The deal is difficult but we averted the pursuit to move state assets abroad," Mr Tsipras said. "We averted the plan for a financial strangulation and for the collapse of the banking system."

Jeroen Dijsselbloem, the head of the eurozone group of finance ministers, said the agreement included a €50bn Greece-based fund that will privatise or manage Greek assets. Out of that €50bn, €25bn would be used to recapitalise Greek banks, he said.

Greek banks have been closed for two weeks, with withdrawals at cash machines limited to €60 per day. The economy has been put under increasing strain, with some businesses closing and other struggling to pay suppliers. 

Parliaments in several eurozone states have to approve any new bailout.

"The road will be long, and judging by the negotiations tonight, difficult," German Chancellor Angela Merkel said on Monday morning.

French President Francois Hollande said the agreement had allowed Europe to "preserve integrity and solidarity".

"We also had to show that Europe is capable of solving a crisis that has menaced the eurozone for several years," he said.

Eurozone leaders had been meeting in Brussels for about 17 hours, with talks continuing through the night.

During the night, reports emerged that Greece was holding out over the proposed role of the International Monetary Fund (IMF) in a new programme, and over the fund to hold Greek assets.