The agreement on the conditions for the mammoth loan should pave the way for Kyiv to get desperately needed funds in the coming months as it faces a budget shortfall four years into Russia's war.

Under the scheme,, Ukraine will be able to spend 60 billion euros of the loan on weapons to help it keep fighting off Russia's invasion.

EU member states have been haggling for weeks over how much weaponry Kyiv can use that money to buy from outside the bloc or Ukraine's own industry.

France had been pushing for tough limitations on purchases from outside the EU, while other countries had argued to open it up more to close partners such as Britain, Canada and Norway.

EU ambassadors agreed a compromise that firms from key allies like Britain that have provided considerable support for Ukraine could be eligible for a greater share of the funds.

But that would depend on those countries being willing to cover a "a fair and proportionate" share of the borrowing costs of the loan, an EU statement said.

Diplomats said the EU's executive, the European Commission, would now look to open negotiations with London on joining the new loan scheme.

The outreach comes after British Prime Minister Keir Starmer said over the weekend he wanted to "do more together" on defence with the EU, as he seeks to rebuild ties after Brexit.

The conditions on offer -- which still have to be approved by EU lawmakers -- look similar to those that sunk British efforts to increase involvement in a separate 150-billion-euro weapons programme last year.

Talks between London and Brussels over access to the EU's SAFE rearmament loan collapsed after the British government baulked at the size of a proposed entry fee.

Pressure for both sides to shore up ties has grown as US President Donald Trump has rocked Washington's long-time allies by throwing translatlantic relations into doubt.

The EU squabbling over eligibility conditions for the loan comes as Ukraine is facing major cash crunch.

Kyiv had been pushing the EU to allow it to buy weaponry from wherever it needs as it scrambles to stave off Russia's devastating attacks.

Under the conditions agreed Wednesday, Kyiv can buy certain arms from countries beyond the EU if weapons producers in the bloc cannot provide them quickly enough.

That should mean that Ukraine can use the funds to buy some weaponry from the United States, such as key Patriot air defence missiles.