Portugal has become the third country to approach the European Union for financial help.
The plea follows similar moves from both Greece and the Irish Republic in calling for EU assistance.
Portugal’s outgoing Prime Minister Jose Socrates has not said how much aid Portugal would ask for but the BBC estimates it could be as much as £70bn. The Telegraph reports the UK could be asked to contribute up to £4.4bn towards the bail-out.
In a television address yesterday, Socrates said: “The government decided today to ask the European Commission for financial help.”
Socrates admission that the country needed EU help was preceded by an announcement by finance minister Fernando Teixeira dos Santos. Dos Santos told a Portuguese business newspaper earlier on Wednesday that it would be “necessary to resort to the financing mechanisms available in the European Union.”
Portugal’s cost of borrowing has risen sharply since its government resigned last month after its proposed austerity measures were defeated in parliament.
Ratings agencies have since downgraded the country’s debt.