Greece opts to take up £26bn bailout

Confirmation came after Greece bowed to the inevitable and decided its economic crisis was now so dire it must take up a pledge of up to E30bn (26bn) from its fellow eurozone countries, and possible half as much again from the International Monetary Fund.

"Greece has not said how much it might require, but a package will take days, rather than weeks, to consider and agree, now that the request has been made," said a Commission spokesman.

A letter from the Greek finance minister to the head of the European Central Bank, the chairman of the eurozone member states and the EU's Monetary Affairs Commissioner, said the loan deal of March 25 had offered aid "when needed".

Now, in the wake of yesterday's downgrading of Greece's international credit rating and statistics showing the Greek deficit is even worse than thought, the finance minister said he was "requesting activation of the support mechanism".

The new figures show the Greek public deficit, already massive at 12.7 per cent – or more than four times the maximum of 3 per cent of GDP allowed under EU single currency stability rules – is actually worse, at 13.6 per cent.

Greece has until now refused to take up the loan offer, insisting it could finance its own debt on world markets.

But with confidence in its economic reform programme slipping, and loan interest rates to Greece climbing, the eurozone/ IMF offer has become one that Athens cannot refuse.

The available deal is designed to ease the Greek burden by offering loans at 5 per cent for three years, instead of the market rate of 7.5 per cent and more that Greece is facing.

German chancellor Angela Merkel always said the bail-out offer was "a last resort" and other EU leaders hoped the offer would calm market fears about the euro and help Greece get its economy back in order.

Now that Greece has been forced to take up the offer, the request will be formally considered by EU governments, before the eurozone states – and the IMF, acting separately – make a decision.

The financial burden will be split between the eurozone countries, broadly on the basis of relative GDP and population size. That leaves Germany picking up the largest slice .

As the UK contributes routinely to IMF funds, London will technically be contributing to any Greek bail-out sanctions by the IMF, although the loan will come from IMF central funds.

The question no one could answer today was whether the latest twist will do what all else has failed to do: stabilise the euro and restore its credibility as a world currency.