Portugal's Parliament has approved a plan to hike taxes and cut salaries and welfare benefits next year in a bid to reverse waning market confidence in its public finances.

Portugal's high debt and low growth have alarmed investors, fuelling speculation it may be the next European country to need a bailout after Greece and Ireland.

The government insists it won't need financial rescue, saying the austerity measures will restore fiscal health.

The austerity measures carried a political cost for the minority Socialist government which managed to pass the plan Friday only after negotiating its content with the main opposition party. All other parties voted against it.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

LISBON, Portugal (AP) _ Portugal is rejecting the idea floated by some fellow European Union countries that it should take a bailout to keep the debt crisis from spreading, the finance minister said Friday.

Investors worry that Portugal, which was due to pass a new austerity plan later in the day, could be the next European country to need a bailout after Greece and Ireland because of its high debt and low growth. To keep the rot from spreading to the much larger neighbor Spain, some believe Portugal should take money earlier rather than later.

"There are those among our (European Union) partners who think the best way to ensure the euro's stability is to push and force those countries which are most in the spotlight to accept assistance," Finance Minister Fernando Teixeira dos Santos was quoted as saying in an interview with daily Jornal de Noticias published Friday.

Teixeira dos Santos did not specify whose views he was referring to. The European Commission, the European Central Bank and the German government all denied they were asking Portugal to take financial aid.

Teixeira dos Santos said in the interview that a bailout was not Portugal's "political option" and that austerity measures expected to be approved by Parliament on Friday would place the country on the path to fiscal health. The government has repeatedly said in recent times it does not want or need assistance.

Parliament was due to vote on a plan to hike taxes and cut salaries and welfare benefits next year.

The minority center-left Socialist government has enough votes to pass its austerity plan after it reached a deal with the center-right Social Democratic Party, the main opposition party.

However, doubts about Portugal's strategy contributed to a rise in the yield on its 10-year bonds to a euro-era record of 7.045 percent Friday.

The government's austerity plan, to be introduced in January, aims to drive the deficit down to 4.6 percent of GDP next year from an estimated 7.3 percent this year. Last year the deficit stood at 9.6 percent _ the fourth highest in the eurozone after Greece, Ireland and Spain.

Teixeira dos Santos said he reckoned Portugal has six months to show markets it is able to bring its spending under control.

"We have to restore market confidence and to do that we have not only to set targets ... but also show results," he was quoted as saying.

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David Rising in Berlin and Gabriele Steinhauser in Brussels contributed to this report.