The make-or-break talks began more than three hours late, delayed because of last-ditch preparatory talks involving the German finance minister, Wolfgang Schäuble, and his Greek counterpart, Yanis Varoufakis. This 11th-hour discussion yielded a fresh compromise text, which is now being presented to the rest of the eurozone.

A Greek government official said: "There is an initial agreement on a joint draft text among the institutional partners, which is now being presented to all of the ministers."

Earlier, the chair of the eurozone finance chiefs' group said there were hopes for a deal despite the challenging backdrop, amid fears that Greece could run out of funds by early March. "There is still reason for optimism but it is very difficult," said Jeroen Dijsselbloem, the Dutch finance minister. "It's quite complicated."

Meanwhile speculation is mounting that there could be a further emergency meetings. The Greek prime minister, Alexis Tsipras, told the head of the European Council, Donald Tusk, that he would request a meeting of EU leaders on Sunday, in the event of "a negative outcome" on Friday night. Officials in Athens are also talking about a summit on Tuesday, after the Greek bank holiday of "clean Monday", marking the start of Lent.

Greek prime minister Alexis Tsipras is "in constant contact" with finance ministry officials attending the euro group. Aides close to the Greek leader have let drop that both the Spanish and Portugese finance ministers attempted to disrupt the euro group meeting but were overuled.

"It is obvious that a very clear threat was levelled re [the possible closure] of Greek banks," the leading political commentator Alexis Papahelas has just told SKAI news adding that a compromise appeared to be in the offing.

Precisely because Tsipras had made been forced to make concessions, he will face uproar on the domestic front, not least from militants in his radical left Syriza party and disappointed voters.