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The plan may include scrapping bonuses to civil servants and employees in state-run companies, newspapers Ta Nea and Isotimia reported, without citing any sources.

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The government may also lower or scrap tax-free thresholds on property holdings and the self-employed, raise consumption taxes on soft drinks and certain fuel types or shift a range of products to a higher VAT-bracket, other newspapers said. Papandreou vowed on Saturday to take any measure necessary to secure more funding for his country.

But a large majority of Greeks say they cannot take more austerity as the country enters its third year of recession. But Papandreou warned that any failure to push through the plan might lead the country straight to default. Papandreou pledged to speed up a 50 billion euro privatisation programme, a key part of efforts to shore up finances without a debt restructuring.

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However, he reiterated that the state would keep stakes in firms managing vital public goods and services, such as water and electricity utilities. In an interview with German magazine Der Spiegel, Juncker urged Greece to set up a trustee institution to help privatize state assets, similar to the body that privatised East German companies after the fall of communism.

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Greeks divided over cuts

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