French President Francois Hollande early Friday morning confirmed an earlier Xinhua report citing sources that Italy and Spain had threatened to block the growth pact until they could secure short-term support to ease their mounting borrowing costs.

European Union leaders had agreed on a growth compact during the first phase of a two-day summit on Thursday evening, but Italy and Spain refused to sign off as they wanted immediate support measures in exchange, Hollande said at a press conference.

Xinhua learnt from two EU sources late Thursday that Italy and Spain had threatened to block the entire growth pact unless they could secure short-term support to ease their financing pressure.

"They (Italy and Spain) could not give a partial agreement. For them, the stability measures must be a priority," said Hollande, referring to Italy and Spain's proposal to use the eurozone's bailout funds to buy new bonds of the two countries.

While unveiling a 120-billion-euro (about 149 billion U.S. dollars) growth package, European Council President Herman Van Rompuy said late Thursday at a press conference that EU leaders had not yet agreed on the wider growth pact.

EU leaders attending the ongoing two-day summit had referred the issue to a parallel meeting of Eurogroup Working Group (EWG) of deputy finance ministers, who were expected to discuss the issue the whole night, the two sources told Xinhua.

In spite of remarkable austerity measures and structural reforms carried out by the two countries, Italy and Spain remain under high financing pressure. On Thursday, Italy paid the most to sell 10-year bond since December, selling the notes to yield 6.19 percent, while Spanish 10- year yields rose to 6.94 percent.

Appealing for direct help from the eurozone, Spanish Prime Minister Mariano Rajoy told reporters as he arrived at the summit, "We're financing ourselves at costs which are too high and many Spanish institutions can't even access funding."

North and west European countries led by the eurozone's paymaster Germany have long been opposed to using the bailout fund to buy member countries' bonds. However, a sign of flexibility emerged when Dutch Prime Minister Mark Rutte said he was "prepared to use exiting instruments to help those countries to get back on track."