German Chancellor Angela Merkel backed down Friday from insisting that private investors shoulder part of any further bailout for Greece, easing fears that the financially struggling nation would default on its debt.

But it remained to be seen whether ratings agencies would go along with a new proposal asking investors to volunteer to wait until Greece has stabilized its economy before demanding debt payments.

The plan, which Merkel announced with French President Nicolas Sarkozy on Friday, would encourage but not require private investors to give Greece more time to repay its $420 billion debt. But ratings agencies could consider even a voluntary acceptance of losses by investors as a default, analysts said, potentially setting off a chain reaction of financial crises for banks and economies throughout Europe and ripple effects around the world.

Germany’s concession appeared to ease a weeks-long standoff over how generous to be toward private investors, pitting Germany against France, the European Central Bank and much of the rest of Europe.

In part to quell public anger at home, Germany had been holding out for deal that could have forced Greece’s private creditors to take losses as part of any new bailout. Merkel’s announcement Friday helped boost financial markets but also set off immediate criticism from some of her closest allies.

“We want a fast resolution,” Merkel said, calling for a “voluntary contribution” from private investors. “There are worries that we want to set off a credit event. We don’t want that.”

The two leaders said that they hoped for a resolution similar to the Vienna Initiative, a 2009 plan to help struggling Eastern European countries by encouraging investors to roll over bonds when they came due, giving the countries more time to restart their economies and produce the money to repay their debts.

Yet even encouraging that type of delay in payments, analysts say, poses huge risks to investors and global financial markets. Though ratings agencies did not declare defaults for Eastern European nations in 2009, they may take a much stricter view of any voluntary program involving Greece, which is in more dire straits than those countries were in two years ago. Also, investors would be put at a financial disadvantage if they volunteer to keep lending to Greece at lower than the current sky-high market rates.

If ratings agencies declared a default, big European banks holding vast sums of Greek debt would no longer be able to use the debt as collateral for loans from the European Central Bank, jeopardizing the banks’ financial health.

A ruling of a technical debt default could also touch off further ratings downgrades for other troubled European economies, including Portugal and Ireland. And it could heighten investor pressure on larger economies such as Spain, Italy and Belgium — potentially triggering another global financial catastrophe.

But Merkel said that she wanted a solution that was acceptable to the European Central Bank — which has been strictly opposed to anything that could set off a technical default.

“The big problem is going to be how the rating agencies interpret a voluntary program,” said Diego Iscaro, senior economist with IHS Global Insight in London. “And will they then start downgrading Portugal and Ireland, thinking the E.U. may use the same option there?”

Germany has dragged its feet repeatedly in negotiations over how to help the embattled economies of several euro zone nations, frequently clashing with France and other countries about how much pain to pass on to private investors. German politicians — and voters — frown on using taxpayer money to pay for what they see as the excesses of other national governments and the poor judgment of investors.

Several leaders from Merkel’s coalition criticized her decision to back down on the bailout demands, and any new plan would have to pass muster with Germany’s powerful Constitutional Court, which has been skeptical in the past about national bailouts.

“The proposal by Sarkozy and Merkel is a Trojan horse,” said Frank Schaeffler, a leader for financial policy for the Free Democrats, the junior coalition partner to Merkel’s Christian Democratic Union. “It looks like a debt restructuring, but it is not,” he said, adding that the longer it takes to restructure debt, the worse off taxpayers will be.

Greece has committed to an austerity program negotiated with the International Monetary Fund and European officials, but domestic opposition to the steep cuts in services and spending has thrown the country into turmoil.

Greek Prime Minister George Papandreou is struggling to cling to power and on Friday appointed a member of the opposition to become finance minister to try to win support for the austerity measures.

Faiola reported from London.