Greece launched renewed bailout talks with its creditors on Monday in a bid to stave off insolvency, following the weekend publication of comments said to be by a top International Monetary Fund (IMF) official criticizing Europe's failure to agree to cutting Athens' debt level.
Financial experts from the European Commission, the IMF and the European Central Bank (ECB) met with Greek Finance Minister Euclid Tsakalotos with the task of negotiating deeper cuts in social spending, including Greece's public pensions programme.
Local media reported that the additional austerity measures required to unlock further loans could cost the government 5 billion euros (5.7 million dollars).
Germany ruled out again on Monday further debt relief for cash-strapped Greece.
"A haircut is for the moment out of the question," said German Finance Minister Wolfgang Schaeuble's spokesman Martin Jaeger as the financial problems facing Greece returned to the international centre stage.
IMF chief Christine Lagarde reacted angrily on Sunday to the publication by Wikileaks of what the whistleblowing website said was a transcript of IMF officials discussing bailout negotiations for Europe's most indebted state.
In a letter to Greek Prime Minister Alexis Tsipras, Lagarde dismissed Athens' claims that the transcript showed the Washington-based organization was attempting to push his nation into default ahead of the July deadline for Athens' next big debt payment as "total nonsense".
If confirmed, the comments by the IMF's European operations chief Poul Thomsen are also likely to step up the pressure on Chancellor Angela Merkel, who spoke with Tsipras on Sunday.
Athens sees Thomsen's comments as signalling the IMF's plans to leave the 86-billion-euro (98-billion-dollar) rescue package Greece hammered out last year to the European Union and pull out of the Greek aid programme.
Greece agreed to the rescue plan in a bid to stave off bankruptcy and remain a eurozone member state.
In his comments on Monday, Jaeger also expressed the hope that Greece's creditors will be able to conclude by the end of April their examination of Athens' progress in implementing the bailout.
But Largarde told Tsipras that she believed that an agreement on the rescue plan was still some way off.
"My view of the ongoing negotiations is that we are still a good distance away from having a coherent programme that I can present to our executive board," the IMF chief wrote in her letter to the Greek leader.
The troubled state of Greece's finances is also likely to be a major topic at a meeting in Berlin on Tuesday between Merkel and the heads of the IMF, the World Bank and the Organization for Economic Co-Operation and Development.
Schaeuble also spoke by phone to Lagarde last week, Jaeger said.