A spokesman for the International Monetary Fund has confirmed that a 28 billion euro bailout loan has been approved for Greece. The decision gives the green light for money to be sent to the country immediately, as part of a second international rescue plan.

IMF spokesman Gerry Rice said: "The IMF's Executive Board approved continued support for Greece's ambitious economic program. The Board agreed new financing of 28 (b) billion euros, over the next four years. This financing is part of the overall package of support from the IMF and Greece's European partners. The Board stressed that Greece's continued reform efforts to improve competitiveness and restore economic growth will be key in overcoming the crisis."

The loan was approved after Greece secured a massive debt-reduction deal with banks and other private bond holders, swapping old government bonds for new ones with better repayment terms.

The IMF has also cancelled its three-year Stand-By Arrangement with Greece that was approved in May 2010. Responding to the move, ratings agency Standard and Poor's raised its rating on the new Greek bonds to a "triple C".

But the agency warned that Greece's sovereign rating would remain in selective default until the exchange is completed next month.

Since May 2010, Greece has been surviving on the first rescue loan package worth 110 billion euros.