Thousands of savers in Argentina will not be forced to swap their bank deposits for government bonds, the country's president has said.

"There will not be mandatory bonds," President Eduardo Duhalde told a press conference on Saturday.

Last month, the Argentine government offered the savers a chance to convert their savings into bonds, in an attempt to end the freeze on savings without leading to the collapse of the country's banking system.

Restrictions on savings were imposed in December last year to stop a run on bank accounts.

But the freeze led to public protests which helped to overthrow the then President Fernando de la Rua, and protests have continued this year with savers demanding access to their cash.

Last week speculation grew that the government was about to force savers to convert their bank deposits into public bonds, in order to save the banks from collapse.

New options

Under the bond plan, savers were given a month to decide if they want to accept peso or dollar bonds to replace their bank savings.

The government offered to swap up to 60bn pesos ($16bn) of deposits for bonds that could be converted to cash in either three, five or 10 year's time.

But reports on Friday suggested that less than 1% of total bank deposits had been swapped for bonds.

On Saturday the economy ministry a number of new incentives for people to accept bonds.

These included allowing them to be used to buy shares on the stock exchange, or to buy new houses.