The junior party in bailed-out Portugal's coalition government has ended days of political tension by endorsing a plan for severe tax increases next year, ensuring the new austerity measures are approved in Parliament.

Senior officials in the center-right Popular Party had expressed misgivings about the finance ministry's 2013 draft budget, which sparked a public outcry.

Their reluctance to back the proposal threatened to bring down the 16-month-old government.

Finance Minister Vitor Gaspar says the extra tax revenue is needed to meet the deficit targets stipulated in Portugal's €78 billion ($102 billion) bailout agreement last year.

Breaking a three-day public silence, Popular Party leader Paulo Portas said in a written statement Thursday his party will approve the budget plan because of the country's "extremely delicate economic and social circumstances."