Argentina has met a key demand of the International Monetary Fund (IMF), inching closer to securing fresh funds.

The Senate has now approved a controversial bankruptcy law, one of the main sticking points over the government's plea to the IMF for cash.

The successful legislation follows weeks of bitter debate.

The Fund wanted the changes to the law in order to protect creditors and businesses who have already suffered heavily from Argentina's debt default and currency devaluation.

But many Argentines are critical of the IMF for demanding protection for creditors while watching the domestic poverty situation worsen.

More hurdles ahead

Despite the progress, there is still no guarantee that more cash will be released.

The IMF is also demanding the passage of another key law on financial crimes that is bogged down by political infighting.

Presidential spokesman Eduardo Amadeo said he expected that law to be passed next week.

"We think the passage of the laws will open the way for us to reach an agreement with the IMF," he added.

Argentina's President Eduardo Duhalde has said that his country's only way to recover is to live up to international agreements and continue seeking help from international money lenders.

Balancing act

Chronic overspending and a deep four-year recession has pushed Argentina into its worst ever financial crisis.

This has resulted in widespread social unrest, including December's fatal riots, because of rising poverty and unemployment.

The protests have been intensifying again in recent weeks, with particularly strong hatred for banking regulations that restrict the withdrawal of cash.

Argentina's president and the recently-installed economy minister, Roberto Lavagna, have the task of finding a balance between satisfying both the IMF and the Argentine people.

It is unlikely that Argentina will be able to pull itself out of its economic disasters without fresh IMF funds, analysts say.

But the unpopular moves demanded by the Fund may end in yet another government being ousted, they say.