Standard and Poor's has become the first ratings agency to improve its outlook on Irish debt following last week's promissory note deal.

Ireland’s rating has been upgraded from "negative" to "stable".

The agency has maintained its BBB+/A-2 credit rating for Ireland.

It said it believed the deal would reduce the Government's debt-servicing costs and increase the likelihood of Ireland's full return to the private bond markets by the end of 2013.

However, the agency said Ireland still had a substantial deficit, heavy public and private debt burdens, and a weakened financial system.

It also warned that it could revise the outlook back to "negative" if the Government failed to comply with its EU/IMF bailout programme.