Portugal's Finance Minister Fernando Teixeira dos Santos has said he does not expect the country to seek external help to cope with its debt.
Mr Teixeira dos Santos insisted that the government 'is doing everything to avert such an eventuality'.
The minister told TSF radio that a bailout would 'cause very serious damage to the country's reputation', which would require years to recover from.
'Portugal is doing its work to solve its fiscal imbalances, it is Europe which seems not to be doing its work in maintaining the stability of the euro,' said Mr Teixeira dos Santos.
Portuguese Prime Minister Jose Socrates has insisted that 'Portugal has the means to finance itself on the markets'.
Speculation has been growing that Portugal will follow Ireland and Greece in seeking a bailout from the European Union and International Monetary Fund.
Germany and France have both officially denied weekend reports that there was pressure on Portugal to accept a bailout.
The European Commission has also denied the reports that Portugal was under pressure to accept assistance.
The commission's economic affairs spokesman Amadeu Altafaj said: 'There are no such talks and there are not even any plans to have any such talks, whether it is about Portugal or another euro zone member state'.
The interest rate premium on Portuguese sovereign debt fell back today to just over 7%, after rising sharply late last week.
