Portugal's caretaker prime minister Jose Socrates says he has reached agreement on a bail-out from the EU and the International Monetary Fund, BBC reports.

In a televised statement, Mr Socrates said the three-year loan was a "good agreement that defends Portugal".

His office says Portugal will be asking for financial assistance worth 78bn euros ($116bn; £70bn).

Officials from the European Commission, European Central Bank and IMF have been working on a deal for three weeks.

Mr Socrates said that Portugal would be given more time to reach its budget deficit targets than had previously been expected.

The deficit will have to be cut to 5.9% of GDP this year, 4.5% in 2012 and 3% in 2013.

Portugal had previously aimed to reduce the deficit to 4.6% this year, 3% in 2012 and 2% in 2013.

"I would like to announce to the Portuguese people that the government has reached agreement today with the representatives of international institutions on the programme of financial aid to our country," he said.

Mr Socrates resigned as prime minister after failing to get austerity measures through parliament. There will be a general election on 5 June.

The deal has to be endorsed by the main opposition parties.

The deadline for the bail-out money to be in place is 15 June, when Portugal has to repay nearly 5bn euros of debt.

Portugal was the third eurozone country to have to ask for a bail-out, after Greece and Ireland.

Its economy is expected to contract this year as a result of the latest set of austerity measures.