The official, speaking on condition anonymity because the talks are ongoing, said Tuesday it is likely the outline of the deal will be settled in the first week of January. Specific terms, including the participation rate of the banks involved, will be worked out later that month.
Banks and other private holders of Greek debt are negotiating a 50 per cent write-down on the bonds. Their bonds will be replaced by new ones backed by a new European rescue fund.
Greek officials have insisted Europe-wide turmoil in debt markets will not affect the crisis-hit country's negotiations.