Greece has rejected proposals for a five-month extension to its bailout deal - as European President Jean-Claude Juncker took an optimistic stance on the chances of the country reaching a deal with its creditors this weekend.
At a press conference following two days of talks, Juncker said more talks, due to begin tomorrow and aimed at unlocking €7bn in bailout money for the stricken Greek economy, were "crucial... not only for Greece but also for the euro area as a whole".
"I am quite optimistic but not over optimistic," he said.
"We have made progres... there is a real chance of concluding an agreement."
However, Greek Prime Minister Alexis Tsipras had taken rather a different view when he spoke to reporters earlier, accusing his creditors of "blackmail".
"The EU founding principles were democracy, solidarity, equality and mutual respect. It was not based on blackmail and ultimatums," he said.
Reuters had earlier reported that creditors had laid out new terms for a bailout, including €15.5bn which would see it through to the end of November, including the €1.8bn it is due to pay the International Monetary Fund (IMF) early next week.
But The Guardian quoted government sources saying the deal had been turned down because it wasn't enough.
"No financing solution could work in the context of the proposal of the institutions," a source told the newspaper.
Tomorrow's negotiations will take place against a background of increasing desperation. Greece must agree economic and fiscal reforms with its lenders before the end of the weekend, or it won't make a payment of €1.8bn due to the IMF on Tuesday. That would put it into arrears, setting it on a course which could lead to default, and ultimately set the course for an exit from the euro.