The European Central Bank bought far more Italian bonds than it was supposed to in July to make up for dwindling opportunities in smaller countries such as Portugal, ECB data showed.

The data illustrated the ECB is quietly prepared to stretch its rules, including politically sensitive national quotas for bond purchases, if needed to carry out its bond-buying scheme, aimed at supporting inflation in the euro zone.

The so-called capital key rule in theory limits the proportion of a euro zone country's bonds the ECB can buy.

It was imposed as a way of persuading critics, particularly in Germany, to accept the bond-buy programme when it was launched in 2015.

While it was never formally dropped, the ECB has said it would be applied flexibly.

It has been buying more French, Italian and German debt to make up for small purchases in Portugal, Slovakia and Baltic countries, while Greece and Cyprus have been excluded from the programme altogether.

It is a hotly debated issue as the ECB prepares to decide whether to extend the €2.3 trillion programme into 2018, with analysts speculating it would have to wind it down, ease the rules or face running out of bonds to buy.

The ECB and Bank of Italy together bought €9.6 billion worth of Italian bonds last month, or nearly one and a half billion euros more than the composition of the €60 billion monthly purchase would dictate.

This was the biggest deviation from Italy's quota relative to the size of the overall monthly amount.

Buying of French and Spanish debt were also oversized compared to their shares of the ECB's capital, the yardstick used to determine how many bonds must be bought.

Given the cloudy inflation outlook, ECB rate setters are reluctant to withdraw their monetary support despite strong economic growth and falling unemployment.

The Frankfurt-based central bank is likely to postpone a decision on the future of its bond-buying programme until October, rate-setters told Reuters after their 20 July policy meeting.