Greece averted on Friday the immediate risk of an uncontrolled default, winning strong acceptance from its private creditors for a bond swap deal which will ease its massive public debt and clear the way for a new international bailout.

The finance ministry said creditors had tendered 85.8 percent of the 177 billion euros in bonds regulated under Greek law. That rate would reach 95.7 percent of all Greek debt with the use of 'collective action clauses' to enforce the deal on  creditors who refused to take part voluntarily.

The result should clear the way for the European Union and International Monetary Fund to release a 130 billion euro ($172 billion) bailout package agreed with Greece last month.

Government spokesman Pantelis Kapsis said the result was a 'vote of confidence' in Greece's ability to carry out deep structural reforms to its stricken economy. 'I think it's a historic moment,' he told private television station Antenna.

'It's good news, it’s a good success,' French Finance Minister Francois Baroin told RTL radio. 'It's something that allows us to stay on a voluntary basis that avoids the risk of default.'

Under the deal, the biggest sovereign debt restructuring in history, creditors will exchange their old bonds for new ones with a much lower face value, lower interest rates and longer maturities. This means they will lose about 74 percent on the value of their investments but Greece's crippling public debt will be cut by more than 100 billion euros.

The deadline for acceptance of the offer for bonds governed by international law and for state-guaranteed bonds issued by public companies has been extended to March 23.

Athens confirmed it would enforce the deal, activating the collective action clauses on the bonds regulated under Greek law. It will not be so easy to force holders of bonds governed by international laws to come to the table.

That may trigger payouts on the credit default swap (CDS) insurance that some investors held on the bonds, an event which would have unknown consequences for the market.

The International Swaps and Derivatives Association said it will meet on Friday at 1300 GMT to decide whether Greek credit default swaps will pay out.

The Institute of International Finance, the bank lobby that negotiated on behalf of Greece's private creditors said: 'The debt exchange results, and the associated unprecedented upfront nominal reduction in the privately-held Greek debt, will catalyze the ... official sector support for Greece's new three-year reform programme,' it added. – Reuters