The lending programme was frozen after Islamabad's nuclear tests earlier this year.

An IMF statement said the deal is dependent on ratification by its board of directors next month.

Owen Bennett-Jones in Islamabad: Pakistan agreed to some IMF demands

The package - the resumption of a $1.5bn loan and the rescheduling of other debt - should help Pakistan fill an expected gap of $5bn in its balance of payments in 1999.

Correspondents say the resumption of the lending programme is vital to Pakistan if it is not to default on repayments of its huge foreign debts.

The Pakistan Government warned in June that it might have to consider a moratorium on foreign debt of $32bn unless access to international finance was resumed.

Pakistan's Finance Minister, Ishaq Dar, said there had been "complete agreement" between the IMF and Pakistan during the talks - sessions which were shrouded in secrecy.

"This is good news. There is no pending issue and everything stands resolved," he said.

The tests were popular - then the sanctions started

The minister added that Pakistan's currency would not be devalued.

The IMF package comes with a number of conditions including structural reform in the country's banking sector, tax reform to increase its tax base, and a provision to try to reduce corruption.