Greece's conservative opposition has rejected EU leaders' calls for national unity, forcing Prime Minister George Papandreou to rely on his slim parliamentary majority to push through the EUR28 billion package of tax increases and spending cuts.

Without approval for the measures, the European Union and International Monetary Fund say they will not disburse the fifth tranche of Greece's EUR110 billion bailout programme.

Athens needs the EUR12 billion to pay its bills next month and avert the euro zone's first sovereign default, which would send shockwaves through a jittery global financial system.

A parliamentary ballot on the framework austerity package is expected on June 29, with lawmakers then due to vote on June 30 on a bill containing specific steps to implement it.

With Greece unable to return to international bond markets next year, as foreseen under its EUR110 billion EU/IMF bailout, European leaders are working on a further bailout of a similar size including a contribution from private banks which would agree to a "voluntary" rollover of their Greek debt.

A French banking source said on June 26 the French Treasury had reached a deal with banks to make a rollover more palatable.

According to the daily Le Figaro, the deal would see creditors reinvest 70 percent of the proceeds when Greek debt comes due, receiving longer-term bonds and shares in a zero-coupon fund.

However some are suggesting the plan needs to go much further.

Axel Weber, the former president of Germany's central bank and once seen as a likely candidate to run the European Central Bank, said Europe needed to consider guaranteeing all of Greece's outstanding debt.