George Osborne has cautiously welcomed the Greek deal, but said: "we need to make sure it works for our country as well as the rest of Europe."
The Chancellor added: "What we really want to see is this turned into a lasting solution. Because this risk from Greece hangs over the whole European economy, including Britain."
Eurozone leaders have reached a tentative deal on Greek debt - here's what we know so far:
- The Greek government requested a three-year,€53.5 billion (£38.5 billion) rescue package from Europe's bailout fund. The fund will be run with European oversight.
- In return for a commitment from Greek PM Tsipras to push through pension, market and privatisation reforms, the 18 other eurozone leaders have agreed to start talks on a new bailout.
- However the Greek parliament must still approve the agreement.
- The deal means that the ECB can continue to support Greek banks, which have come close to collapse.
Nigel Farage has reacted to the tentative Greek debt deal to say that the agreement shows that: "national democracy and membership of the eurozone are incompatible."
Nigel Farage quick out of the traps on the emerging #Greece deal: shows 'national democracy and membership of the Eurozone are incompatible'
If I were a Greek politician I would vote against this deal. If I were a Greek 'no' voter I would be protesting in the streets. Mr Tsipras's position is now at stake. This conditional deal shows that national democracy and membership of the eurozone are incompatible.
French President Francois Hollande has said "Europe has won" as a debt deal was struck with Greece.
He said that to have lost Greece as a member would have been to lose "the heart of our civilisation" and called on the Greek parliament to convene within hours to adopt the new package of austerity measures.
Greek banks are expected to remain closed for a few more days while details of the package are finalised.
German Chancellor Angela Merkel said that a deal was struck over the Greek crisis despite the recent loss of trust, which she called, "the most important currency."
This success has come in spite of the fact that in the past few weeks and months, the most important currency, namely trust, was indeed lost between us, but as we all know, paper is patient.
In other words, (going forward) step by step, what will be important will be to implement what we have agreed on during the night. In the opening paragraphs of this document, we point to the fact that trust needs to be rebuilt, that those in charge in Greece have to to take responsibility for what we have decided here politically in order to be able to implement all of it.
The Greek Prime Minister has said his country "will continue to fight to return to growth" after accepting a bailout deal.
Alexis Tsipras told a news conference it had been a "tough battle" with "difficult decisions" but he had managed to "avert a banking system collapse" and stay in the Euro.
The terms of the deal will include debt restructuring and a debt package of €35bn.
Greece will see a 'key loss of sovereignty' with the €50bn fund, as part of the eurozone deal, ITV News Economics Editor Richard Edgar reports:
Key concession seems to be the 50bn fund set up with privatisation of Greek assets. Key loss of sovereignty
"Trust can be regained" says Merkel - but it's not yet, note.
Austrian PM says Tsipras relented and has allowed IMF involvement in the bailout of - another v symbolic concession.
Jean-Claude Juncker, the president of the European Commission, has said there will not be a "Grexit" after agreement was reached on a new Greece debt deal following "laborious" talks in Brussels.
ITV News' Richard Edgar reports:
Juncker "there is no Grexit"
Juncker - the agreement was laborious"!
Today, we had only one objective: to reach an agreement. After 17 hours of negotiations, we have finally reached it. One can say that we have 'agreekment'. Leaders have agreed in principle that they are ready to start negotiations on an ESM programme, which in other words means continued support for Greece.
There are strict conditions to be met. The approval of several national parliaments, including the Greek parliament, is now needed for negotiations on an ESM programme to formally begin.
Nevertheless, the decision gives Greece a chance to get back on track with the support of European partners.
Questions remain over the Greek deal as it must still be approved by the Greek parliament.
ITV News Economic Editor Richard Edgar reports:
Dijsselbloem is setting out plans for next few days: Greek parliament has to approve package 1st. Big question hangs over this
Dijsselbloem - Greek product and labour market reforms still need work.
Dijsselbloem - "trust was a very key issue"