ATHENS, Greece — Greece has cleared a major hurdle in its race to avoid bankruptcy by persuading the vast majority of its private creditors to sign up to the biggest national debt writedown in history, paving the way for a second massive bailout.

Following weeks of intense discussions, the Greek government said Friday that 83.5 percent of private investors holding its government bonds were participating in a bond swap. Of the investors holding the €177 billion ($234 billion) in bonds governed by Greek law, 85.8 percent joined.

“We have achieved an exceptional success … and I believe everyone will soon realize that this is the only way to keep the country on its feet and give it a second historic chance that it needs,” Finance Minister Evangelos Venizelos told Parliament.

He said he would recommend the activation of legislation known as “collective action clauses” to force bondholders who refused to sign up into the swap. The issue was to be discussed at a Cabinet meeting Friday afternoon.

“A window of opportunity is opening” with the success of the deal to reduce the country’s 368 billion-euro debt by 105 billion euros, or about 50 percentage points of gross domestic product, he said.

The bond swap is a radical attempt to pull Greece out of its debt spiral and put its shrinking economy back on the path to recovery. The hope is that by slashing debt, the country can gradually return to growth and eventually repay the remaining money it owes.

The investors will exchange their bonds with new ones worth 53.5 percent less in face value and easier repayment terms for Greece. A total of $273 billion of Greece’s debt is in private hands. The swap will effectively shift the bulk of the remaining debt into public hands — mainly eurozone countries contributing to Greece’s bailouts.

If the exchange had failed, Greece would have risked defaulting on its debts in two weeks, when it faced a large bond redemption. A successful bond swap is also a key condition for Greece to receive a $172 billion package of rescue loans from other eurozone countries and the International Monetary Fund.

Eurozone finance ministers said after a conference call on Friday that Greece has fulfilled the conditions to soon get approval for the bailout.

“There is no doubt that we will be able to decide on the release of the second Greece package next week,” German Finance Minister Wolfgang Schaeuble said. The IMF has set a tentative date of March 15 to discuss the size of its participation in the bailout.

The ministers also released up to $47 billion in bailout money to fund the debt swap. Investors exchanging bonds will receive up to 30 billion euros — or 15 percent of the remaining money they are owed — as a sweetener for the deal and 5.5 billion euros for outstanding interest payments.

“The debt exchange represents the largest ever sovereign debt restructuring,” said Charles Dallara, the managing director of the Institute of International Finance, the body that negotiated the deal with the Greek government on behalf or large investors.

Markets, which had rallied on Thursday on expectations of a successful deal, were muted on Friday. The Stoxx 50 of leading European shares was up 0.1 percent, but the main stock index in Athens was down 0.32 percent in midday trading. The euro retreated 0.4 percent from recent highs to $1.3215.

“After quite a rollercoaster ride, it looks like Greece has finally done it … allowing Europe to avoid what could have been a disorderly default in which the costs do not bear thinking about,” said Simon Furlong, a trader at Spreadex.

The International Swaps and Derivatives Association was meeting to determine whether the bond swap would be deemed a so-called “credit event” — a technical default — which would trigger the payment of credit default swaps, which is essentially insurance against a default.

When the debt relief plan was first announced last year, eurozone leaders and the ECB worked hard to avoid a credit event, because they feared the a payout of CDS could destabilize big financial institutions that sold them.

However, since then a CDS payout has started to look less threatening. The ISDA, a private organization that rules on credit events, said that if triggered, overall payouts on CDS linked to Greece will be below $3.2 billion. That amount is spread over many financial firms and likely too small to significantly hurt any one of them.

Under Greece’s bond swap, holders of €172 billion ($228 billion) in Greek- and foreign-law bonds agreed to sign up to the deal. By triggering the collective action clauses to force holdouts to join, Greece will secure a participation level of 95.7 percent, or €197 billion ($261 billion). The country also extended the deadline for holders of foreign law bonds, of whom 69 percent have so far signed up, until March 23.

EU economic affairs commissioner Olli Rehn said he was “very satisfied” by the high turnout, and urged Athens to press ahead with its austerity program, implemented over the past two years amid deep popular resentment.

“That contribution by the private sector is an indispensable element to ensure future sustainability of the Greek public debt and, thus, a decisive contribution to financial stability in the euro area as a whole,” he said.

“I now expect the Greek authorities to maintain their strong commitment to the economic adjustment program and to rigorously and timely implement the policy package.”

IMF head Christine Lagarde also welcomed the debt writedown agreement. “This is an important step that will dramatically reduce Greece’s medium-term financing needs and contribute to debt sustainability,” she said.

On the streets of Athens, however, many remained skeptical about the deal and pessimistic about the future. Panayiotis Theodoropoulos said the writedown was good “for them.”

“For us? Nothing. Everyone looks out for themselves. In a while the people will be living on the streets,” he said.

The debt crisis, sparked by years of overspending and waste, has left Greece relying on funds from international bailout loans since May 2010. Austerity measures including repeated salary and pension cuts and tax hikes imposed in return have led to record unemployment with more than 1 million people out of work, a fifth of the labor force.

The national statistical authority said Friday that the recession in the last quarter of 2011 was deeper than initially forecast, reaching 7.5 percent instead of 7 percent. The economy is expected to shrink for a fifth straight year in 2012, stagnate in 2013 and modestly expand in 2014.

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By Elena Becatoros and Nicholas Paphitits. Derek Gatopoulos and Demetris Nellas in Athens, Gabriele Steinhauser in Brussels and Geir Moulson in Berlin contributed to this report.

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