Spain agrees to austerity cuts deal by just one vote

The package, which includes a cut in civil servants' salaries, was approved by 169 votes in favour, 168 against and 13 abstentions in the 350-seat lower chamber.

A defeat would have been a serious blow for the Socialist government of Prime Minister Jose Luis Rodriguez Zapatero.

The measures have been welcomed by the Europe Union and international economic bodies but much criticised at home as a major U-turn on social policies by the Socialists. They aim to cut spending by 15 billion euros this year and next.

Spain has been coming under increasing pressure to introduce labour market, fiscal and banking reforms to cut its large deficit.