Senior European leaders are negotiating an overhaul of the euro zone's 440 billion-euro ($599.1 billion) rescue fund in exchange for new austerity measures and closer surveillance on struggling states, a newspaper report said on Monday.

The Financial Times, citing unnamed government sources involved in the talks, said leaders are considering enhanced surveillance of Spain and Portugal rather than assistance, which would give a European Union stamp of approval on proposed reforms.

The EU should not try to impose a program on any country, Olli Rehn, the EU's economic and monetary affairs commissioner, told the FT in an interview.

Spain is taking very bold and profound measures.

No decisions are likely at a summit of EU leaders in Brussels on Friday, the newspaper said.

Euro zone sources told Reuters on Friday that the EU was also considering extending bailout loans to Greece and Ireland to 30 years in a bid to draw a line under the bloc's debt crisis.

John Lipsky, the IMF's first deputy managing director, told the newspaper the cases of Greece and Ireland were extremely difficult, adding that loans to both countries had no guarantee of success.

There is no getting around that. That is why the measures were implemented, he said.

He also said it is difficult to say whether the EU and IMF loans would work because there are so many variables.

The emphasis is on the authorities' efforts to put their economic and financial houses in order in a difficult situation.

(Reporting by Karolina Tagaris; Editing by Bernard Orr)