Eurozone members have delayed the approval of more than half of the €130bn loan for Greece, raising fears the troubled economy will officially default.

At a Brussels-based meeting yesterday eurozone finance ministers signed off funding for a €206bn restructuring of privately held Greek debt, but said they would need further reassurance from Athens before handing over the remaining €71bn in bail-out funds, the Financial Times has reported.

News of the delay has crushed hopes that the full bail-out would be completed next week and that a Greek default on a €14.5bn bond due on March 20 would be avoided.

According to reports, the decision to split the bail-out into two parts comes amid concerns from member states that Athens is not doing enough to implement austerity cuts and reforms.

Finance ministers raised several concerns over the way Greece is tackling austerity cuts, including a €300m gap that re-emerged when the Greek government changed the way unemployment benefits were paid.

As part of the signed off deal, €35.5bn will be allocated to private bondholders as part of the complex debt swap arrangement.

Another €23bn was approved to recapitalise Greek banks, which will see their reserves cut back when their Greek bonds are cut in value as part of the swap. In addition, another €35bn was approved to ensure Greek banks can access liquidity from the European Central Bank.

Yesterday a ruling by the International Swaps and Derivatives Association said the debt deal would not trigger so-called "credit default swaps" – insurance-like policies that must be paid out in the event of a default.

The ruling eased concerns that a CDS payout could reignite financial contagion because financial markets do not know which institutions would be hit by losses.

Eurozone members will meet again on March 9 to give a final sign-off on the deal.

Greece has already been downgraded to a selective default rating by S&P's.