The International Monetary Fund has agreed to a five and a half billion dollar rescue package for Pakistan after two weeks of intensive negotiations.

The resumption of aid follows a freeze in the aftermath of Pakistan's nuclear tests in May, which brought the country close to bankruptcy.

Ministers say the promise of an initial loan of one-point-three-billion dollars from the IMF and the rescheduling of its debts means that the threat of a default is now over.

The BBC correspondent in Islamabad says Pakistan has agreed to some of the IMF's demands, including an increase in sales tax, but officials insist they made no major concessions.