The €750bn (£677bn) coronavirus fund will be used as loans and grants to the countries hit hardest by the virus, Sky News reported.

The remaining money represents the EU budget for the next seven years.

The talks began on Friday between leaders of the 27-nation group, with a divide emerging between those nations hardest hit and those intent on a more “frugal” package of measures.

Denmark, Sweden, the Netherlands and Austria all pushed back on an initial package of grants worth €500bn (£450bn), reportedly causing Emmanuel Macron, the French president, to bang his fists in anger.

Hard-hit countries, such as Spain and Italy, were asking for a more flexible deal to help them deal with the aftermath of the coronavirus pandemic.

Announcing that a deal had been reached after a grueling 90 hours of negotiations, president of the European Council, Charles Michel, wrote “Deal!” on Twitter at 4.31am local time (5.31am UK time).

Talks lasted so long that leaders of Ireland and Luxembourg had to briefly leave Brussels to travel home, before returning to the negotiations later on.

Ursula von der Leyen, the European Commission president, told a press conference that the long summit had been “worth it”, adding: “Europe as a whole now has a big chance to come out stronger from the crisis”.

Mr. Macron called the deal a “historic day for Europe”, while German Chancellor Angela Merkel said: “This is an important signal beyond Europe’s borders that the EU, even with all the (leaders’) varying backgrounds, is able to take action.”

Italian leader Giuseppe Conte said the plan “will allow (Europe) to face the crisis with strength and effectiveness.”

Mr. Conte added that almost 30% of the €750bn (£677bn) recovery fund will be headed to Italy – a country where more than 35,000 people have died.

Mark Rutte, prime minister of the Netherlands and one of the so-called “frugal-five”, said that despite tough negotiations and disagreements, relations with EU partners remained “strong”.

Europe became the centre of the outbreak in the early stages of the pandemic as strict lockdowns were imposed and tens of thousands of deaths recorded.

More than 135,000 people have died with coronavirus across the EU, with the bloc’s economy shrinking by 8.3%.

Now that most countries have significantly eased their lockdowns and stabilized the situation there is a focus on dealing with the huge economic fallout.