NEWS PAPER ATHENS/BRUSSELS, June 4 (Reuters) - Greece delayed a key debt payment to the International Monetary Fund due on Friday as Prime Minister Alexis Tsipras, facing fury among his leftist supporters, demanded changes to tough terms from international creditors for aid to stave off default. The IMF said Athens planned to bundle four payments due in June into a single 1.6 billion euro lump sum which is now due on June 30. It was the first time in five years of crisis that Greece has postponed a repayment on its 240 billion euro bailouts from euro zone governments and the IMF, even though Tsipras said earlier this week that Athens had the money and would make the payment. The delay came as German Chancellor Angela Merkel said talks on a cash-for-reforms deal were still far from reaching an agreement. In a sign of accelerating efforts to bridge the remaining differences, Tsipras, Merkel and French President Francois Hollande spoke late on Thursday evening via conference call, according to a Greek government official. Tsipras, elected in January on a promise to end austerity, returned from late night talks with EU officials in Brussels to face an outcry over conditions that would breach the "red lines" his Syriza party has declared. Tsipras told ministers the government could not accept "extreme proposals" and said the creditors should understand that the Greek people had suffered enough and they "have to stop playing games at its expense", a Greek official said. "They have not made any step back, regardless of the convergence reached during these four months on reforms that the Greek side included in its proposals but the lenders draft proposal did not," a Greek government official said on condition of anonymity. "Their stance raises questions on whether they have contributed in reaching a mutually beneficial solution." Tsipras is due to brief parliament on the negotiations from 1500 GMT on Friday. Earlier the novice prime minister left the talks with European Commission President Jean-Claude Juncker and the chairman of euro zone finance ministers, Jeroen Dijsselbloem saying a deal with lenders was "within sight" and that Athens would make a 300 million euro payment to the IMF on Friday. His tone appeared to harden after he ran into a backlash in Athens. LARGE GAPS European officials continued to voice optimism that an agreement could be clinched in the coming days, but they acknowledged that large gaps remained to be bridged and said they expected Greek counter-proposals. Tsipras rejected pension cuts and a tax rise on electricity that he said the lenders were demanding along with other conditions to win the release frozen loans and avert a default that could hit euro zone and world markets. Sources familiar with the creditors' five-page plan said it also asked Athens to commit to selling off state assets and maintaining unpopular labour reforms, demands that would cross the party's declared red lines. The lenders were demanding that Greece reduce spending on pensions by 1.0 percentage point of gross domestic product and raise a further 1.0 percent or 1.8 billion euros ($2 billion) by increasing value-added tax on products ranging from drugs to electricity, the sources told Reuters. Merkel, the EU's most influential leader, said the end was not yet in sight in the talks, telling a news conference: "The talks are far from reaching a conclusion." She has tried to force the pace this week, at least partly to avoid a Group of Seven summit she will host in Bavaria from Sunday turning into another crisis session on the euro zone, highlighting Europe's difficulty in solving its own problems. Her spokesman said Tsipras would not be invited to the G7. Dijsselbloem said the Brussels talks that ran beyond midnight had narrowed down the remaining issues but differences were "still quite large" and Athens was expected to present alternatives to some of the lenders' proposals within days. An EU source said Tsipras could return to Brussels for further talks late on Friday night or Saturday, possibly along with top IMF and ECB officials Time is running out to clinch a deal and get disbursements approved by national parliaments before the bailout programme expires at the end of June. In one concession, the lenders were offering to unlock 10.9 billion euros in unused bank bailout funds that would enable Greece to cover its financial needs through July and August, an amount that is more than the 7.2 billion euros left in the expiring bailout.

• published: 04 Jun 2015
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