Greece 'Evaluating' Last Ditch Bailout Offer

The Greek government is considering a final bailout offer, just hours before it is expected to default on a €1.6bn repayment.

A Greek official confirmed there were, what he called "initiatives" shortly after the Greek daily Kathimerini reported that the country's prime minister Alexis Tsipras was "evaluating" a proposal made yesterday by the EU Commission president, Jean-Claude Juncker.

It included options for debt relief and more help for Greeks on low incomes.

But the offer would also mean Mr Tsipras having to write to Mr Juncker and other EU leaders saying he accepted the rest of the deal that was on offer the previous weekend when talks broke down.

He would also have to change his position on Sunday's referendum, having previously urged Greeks to vote against the creditors' proposals.

Polls have suggested Mr Tsipras is on course to lose that vote, with a majority of Greeks favouring membership of the eurozone over a potential default and return to the drachma.

Athens withdrew from negotiations over a new EU bailout package at the weekend after it was made clear it would have to impose austerity measures in exchange for cash.

Mr Tsipras was angered when the European Central Bank then refused to raise the limit placed on emergency funding for Greek banks.

Earlier on Tuesday, the prospect of a deal looked bleak as the clock ticked down to the loan repayment to the International Monetary Fund and the end of its current bailout.

Mr Tsipras admitted on Monday night that his country was unlikely to meet the debt but he remained defiant in an interview with Greek TV.

"How is it possible the creditors are waiting for the IMF payment while our banks are being suffocated", he said.

European leaders have warned the referendum could lead to Greece leaving the monetary union.

French president Francois Hollande said: "What is at stake is whether or not Greeks want to stay in the eurozone or want to take the risk of leaving."

German Vice-Chancellor Sigmar Gabriel added: "It must be crystal clear what is at stake. At the core, it is a yes or no to remaining in the eurozone."

Mr Tsipras had asked for Greece's bailout programme to be extended for a month to allow the referendum to be carried out "in a calm and positive climate."

However, eurozone leaders immediately rejected the idea.

As the financial crisis deepened , it was confirmed that banks and the country's stock exchange would remain shut until 7 July, and the daily limit on withdrawals from cash machines would be limited to just €60.

Concerned British tourists who are heading to Greece have been told the ATM limits will not apply to foreign debit cards - but in practice, some cash machines may not be able to tell the difference.

The Association of British Travel Agents is advising visitors to take all of the euros they may need in cash, but says credit and debit card transactions in shops and restaurants will be unaffected.

Sky (Other OTC: BSYBF - news) 's Siobhan Robbins, in Corfu, said credit cards were still being accepted though businesses were hungry for cash.

Taverna owner, Dimitris Kourkoulis, claimed his business was benefiting from tourists bringing extra cash, saying: "The fact that people are bringing more cash with them, they have more cash to spend and even our tips have gone up by 40% this month."

Financial markets remained in the doldrums on Tuesday following sharp falls on European stock markets the previous day.

Investors remain nervous on the ramifications of a Greek debt default, with the euro weakening further against the pound and dollar.