"It was now or never," Swiss transport minister Moritz Leuenberger told reporters.

"EU transport ministers have accepted the deal. It won't be touched now," Switzerland's Ambassador to the EU Alexis Lautenberg told reporters.

Leuenberger said Italy, whose hauliers must cross the Alps to take their goods to northern Europe, had challenged every aspect of the Swiss proposal during negotiations that continued all through the night, but its "cornerstones" had remained intact.

"Italy asked for everything: lower road charges, a different safeguard clause, higher quotas (for transit trucks) during the transition period, and a delay in the start of the charging regime," Lautenberg said.

Under the deal, which still needs to be endorsed by foreign ministers from the 15-nationEU, Switzerland agrees to phase out by 2005 its ban on EU transit trucks of over 28 tonnes, and instead levy tolls on the trucks based on the amount of environmental damage they cause.

The toughly fought pact also clears the way for EU transport ministers to agree later on Tuesday an environment-based truck charging system for the EU states, Lautenberg said.

This is expected to include an 84 Ecu ($99) toll for trucks crossing Austria from Germany to Italy over the environmentally sensitive Brenner Pass through the Alps.

Lautenberg said Bern had agreed to increase the quota of EU 40-tonne trucks crossing its territory during the phase-in period to 300,000 from 200,000 in 2001-2002 and to 400,000 from 300,000 in 2003-2004.

Switzerland also agreed not to impose its maximum levy on transit trucks, averaging 200 Ecus, before the completion of a new Alpine rail tunnel in 2006 or 2007. "I think the compromise on the levy was the thing that made the difference," a Swiss diplomat said.

In return, Bern wonthe right to keep its post-transition regime as it originally proposed, with tolls averaging 200 Ecus, a ban on trucks travelling at night and a safeguard clause allowing the authorities to raise the levies by 12.5 per cent twice in five years if road traffic rose to intolerable levels.

"We tried to compromise over the transition period but keep the definitive charging regime intact," Lautenberg said.

As well as road and air transport, the planned trade and cooperation pact which Switzerland and the EU have been negotiating since 1995 covers agriculture, research, public procurement, mutual recognition of standards and free movement of persons.