LONDON, England - July 21, 2011 - Greece is set to lead the eurozone's first-ever default as European leaders agreed that the private holders of Greek debt will take a hit of 50 billion euros over three years.

Breaking weeks of deadlock, the heads of the 17 eurozone governments conceded that a "controlled" failure was the only way to prevent the collapse of the single currency and a global financial rout.

As part of the deal Greece will also receive another bailout package - from Europe, the International Monetary Fund and the private sector - worth 159 billion euros.

The second bailout, which follows the rescue funds of 110 billion euros agreed to last May, will cut Greece’s debt by one quarter.

The private sector will provide 49.6 billion euros via a variety of measures in the next three years, including a 12.6 billion euros debt buy-back program. The fresh rescue attempt has been agreed to inorder to  “decisively improve the debt sustainability and refinancing profile of Greece.”