Euro zone finance ministers have set next October as the intended target date for taking a decision on the restructuring of Ireland's bank debt.

The announcement was made by the European Commission Vice President Olli Rehn after more than nine hours of discussions in Brussels.

Technical work will now be undertaken over the summer by officials from the Commission, ECB and IMF, before Ministers evaluate their progress at their September meeting.

Euro zone finance ministers claimed new progress in fighting the debt crisis.

The Minister for Finance, Michael Noonan, has said he hopes significant progress can be made in reducing Ireland's bank debt burden.

He said he was pleased with the decision of euro zone finance ministers to agree both a process and timeframe for the debt renegotiation talks.

He described the target date for concluding negotiations in October as satisfactory.

With Spain under pressure on the financial markets, euro zone finance ministers approved plans overnight to provide €30 billion for its banks this month, with €100 billion potentially available in all.

At the same time, the 17-nation single currency bloc agreed to extend a deadline for Spain to cut its public deficit to the EU's 3% limit by one year to 2014 because of the difficult economic conditions it faces.

Financial markets signalled some approval of the decisions and European markets were up about 1% this morning.

The euro zone bond market had come under acute pressure yesterday when Spanish and Italian bond rates rose sharply and German and French rates fell, on scepticism that the Eurogroup meeting of finance ministers would amount to much.

"The markets have to realise that the money is there, more than they realise," said Luxembourg Finance Minister Luc Frieden as he went into the meeting of all 27 European Union finance ministers.

"We must try that these states get back to their feet and I think that one year more or less, if that can help a state, is not a wrong signal," he added.

Spanish Economy Minister Luis de Guindos said the "two agreements are very positive," giving Madrid the time and the money "to thoroughly clear up the banking sector."

Austria's Maria Fekter, a hardliner on aid for euro zone states needing help, noted that the deal for Spain "contains a lot of conditions, items and formalities Spain has to meet."

A continuous series of meetings and summits have marked the course of the near three-year debt crisis, with EU leaders repeatedly being outflanked by investors sceptical that they really can put their house in order.

A June 28-29 EU summit was hailed as a "breakthrough" after it promised Spain aid for its banks, the setting up a new bank regulator and made it easier for the new permanent ESM euro zone bailout fund to fund struggling members.

After an initial euphoric welcome, however, market sentiment quickly turned negative, putting Spain and Italy back under pressure and the euro zone on the the defensive.

Jean-Claude Juncker, the head of the euro zone finance ministers group, said the meeting had also discussed the situation in Greece and in Cyprus, which has just asked for EU aid.

Cyprus, current holder of the EU's rotating presidency, blames its problems on its banks' heavy exposure to Greece, and its aid programme is expected to be completed by September.