Greece claimed a major success for its bond swap offer to private creditors on Friday after it won heavy acceptance for a deal that averts the immediate risk of an uncontrolled default on its massive public debt.

The finance ministry said 85.8 percent of its 177 billion euros in bonds regulated under Greek law had been tendered, adding that the rate would reach 95.7 percent with the use of collective action clauses to enforce the deal on creditors who refused to take part voluntarily.

The result should clear the way for the European Union and International Monetary Fund to release a 130 billion euro bailout package agreed with Greece last month.

Government spokesman Pantelis Kapsis said the result was a vote of confidence in Greece's ability to carry out deep structural reforms to its stricken economy. I think it's a historic moment, he told private television station Antenna.

The biggest sovereign debt restructuring in history will see bond holders accept losses of some 74 percent on the value of their investments in a deal that will cut more than 100 billion euros from Greece's crippling public debt.

The deadline for acceptance of the offer for bonds governed by international law and for state-guaranteed bonds issued by public companies has been extended to March 23.

Athens confirmed it would enforce the deal on all its bondholders, activating the collective action clauses on the bonds regulated under Greek law.

That may trigger payouts on the credit default swap (CDS) insurance that some investors held on the bonds, an event which would have unknown consequences for the market.

The Institute of International Finance, the bank lobby that negotiated on behalf of Greece's private creditors said: The debt exchange results, and the associated unprecedented upfront nominal reduction in the privately-held Greek debt, will catalyze the ... official sector support for Greece's new three-year reform programme, it added.

OPTIMISM

Despite the success, the deal will not solve Greece's deep-seated problems and at best it may buy time for a country facing its biggest economic crisis since World War Two and crushed under debt equal to 160 percent of its gross domestic product.

However, financial markets rose strongly in the run-up to the deadline and afterwards, with global stocks enjoying their best day in more than two months on Thursday and Tokyo stocks jumping to a 7-month high on Friday as the threat of an immediate and uncontrolled default receded.

Athens must have the funds in place by March 20 when some 14.5 billion euros of bond repayments are due, which it cannot hope to repay alone.

Greece has staggered from deadline to deadline since its crisis broke two years ago and several of its international partners have expressed open doubts about whether its second major bailout in two years will be the last.

Analysts were cautiously optimistic, but acknowledged the bond swap was unlikely to draw a line under Greece's troubles.

Even when a messy default is prevented, the upcoming election in Greece next month will be the next risk factor, Yuji Saito, director of the foreign exchange division at Credit Agricole Bank in Tokyo, said.

Tim Ghriskey, chief investment officer at Solaris Group in New York, said: This does not mean the debt situation in Greece is resolved, and this is not the last time we will be hearing about this. But it is a relief that it didn't go the other way. It could have been a lot worse.

Underlining the severe problems facing Greece after five years of deep recession, data on Thursday showed unemployment running at a record 21 percent in December, twice the euro zone average, with 51 percent of young people without a job.

There has been growing resentment among ordinary Greeks over the austerity medicine ordered by international creditors which has compounded the pain from a slump which has seen the economy shrink by a fifth since 2008.

Support for the two parties backing technocrat Prime Minister Lucas Papademos remains low and prospects of a clear majority in the election are thin.

(Additional reporting by Harry Papachristou and Angeliki Koutantou, Aloisio Alves in Rio di Janeiro, Angela Moon in New York, Chikako Mogi in Tokyo; Writing by James Mackenzie and Deepa Babington; Editing by Alison Williams and David Stamp)