The disbursement of this tranche of the $86bn international bailout agreement was dependent on the two sides striking a deal on 48 economic and financial overhauls the country has to deliver in return for the money. Greece still needs to legislate for the reforms before the payment gets the go-ahead.

“This is good news,” said Jeroen Dijsselbloem, Dutch finance minister and president of the Eurogroup, in a statement. “The Europgroup Working Group discussed the state of play [on Tuesday] and welcomed the substantive progress made.”

Of the $12bn, $2bn is for loans for the general support of the Greek government budget and $10bn for recapitalising the country’s cash-strapped banks.

The biggest sticking point of the agreement centred around the treatment of homeowners who are in arrears on their mortgage.

The country’s left-wing Syriza government wanted to protect a large proportion of citizens from losing their homes, but creditors thought the scale of protections the government wanted would encourage the non-payment of debts and further weaken the banking system.

The resulting deal gives the most vulnerable 25% of households protection and a further 35% partial protection dependent on a range of other criteria.

Bank governance and new taxes have also been subject to dispute.

The Greek government is due to present the package of reforms to Greece’s parliament tomorrow. If passed, creditors are expected to sign off on the disbursement of funds by the end of the week.