International Monetary Fund managing director Christine Lagarde has denied that the IMF would threaten to push Greece closer to default as a negotiating weapon in a new Greek bailout deal.
Writing to Greek Prime Minister Alexi Tsipras, Lagarde said that her view of the ongoing negotiations is that "we are still a good distance away from a new bailout deal".
She wrote: "I have on many occasions stressed that we can only support a program that is credible and based on realistic assumptions, and that delivers on its objective of setting Greece on a path of robust growth while gradually restoring debt sustainability."
"Otherwise it would fail to re-establish confidence, with the implication, among others, that Greece would soon again be forced to adopt yet more measures. Of course, any speculation that IMF staff would consider using a credit event as a negotiating tactic is simply nonsense.
"I agree with you that successful negotiations are built on mutual trust, and this weekend’s incident has made me concerned as to whether we can indeed achieve progress in a climate of extreme sensitivity to statements of either side. On reflection, however, I have decided to allow our team to return to Athens to continue the discussions."
The letter comes after Tsipras' office ask Lagarde to clarify the IMF's position after a leaked transcript surfaced of a conversation between senior IMF officials.
In his letter to Lagarde, Tsipras "expressed his concern about the credibility of the negotiations after the leaks", according to Reuters.
The officials discussed tactics to apply pressure on Greece, Germany and the EU to reach a deal in April.
The conversation involving head of IMF's Europe department Poul Thomsen and Delia Velculescu, leader of the IMF team in Greece, reportedly involved discussion that the IMF could threaten to pull out of the troika of lenders in Greece's third bailout as a way to force EU creditors, and particularly Germany, to come to agreement on debt relief before the UK's EU referendum.
The discussion also included talk of whether more austerity could be forced on Greece ahead of repayments in July.
Greece said the transcript shows that the IMF wants to extend negotiations until July, when the Greek government has to make its next debt repayment. If that happens the IMF would have more leverage as the deadline would be coming close. The Greek government have viewed this as a way for the IMF to elicit Greece to give in on pensions cuts.
IMF and EU leaders are scheduled to resume talks in Athens on Greece's progress today.