The country's employment minister, George Katrougalos, warned the Fund today it would no longer tolerate its "extreme" calls for reforms to the minimum wage, pensions and collective bargaining rules.
The IMF is one leg of the troika, along with the European Central Bank and the Eurozone, who bailed out the country in a series of debt crises since the financial crisis. In last summer's deal, the trio handed Greece €86bn to avert a shutdown of the economy only after Greek prime minister Alexis Tsipras took Greece to the edge of leaving the single currency with a national referendum on the bailout.
However, the IMF did not join the latest €10.3bn disbursement of funds which took place over the summer, as it is awaiting a full debt sustainability review. Greece currently owes its creditors 182 per cent of its GDP, with the troika divided over how to manage the repayment schedule.
The IMF has been one of the chief advocates for either writing off portions of the loans, or substantially easing the conditions attached to repayment. However, in return, it has expected Greece to undertake wholesale changes to its employment laws in order to get the economy moving.
This has proved problematic for the left-wing Syriza party, which was elected on a mandate to oppose austerity.
Speaking to Reuters, Katrougalos said: "We've reached a point where we can no longer tolerate the deterioration of Greek workers' status."
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The IMF has urged Greece to take control of setting the minimum wage, water down collective bargaining and make it easier for firms to dismiss employees.
"There are measures which employers have already rejected in Greece," Katrougalas said. Threatening to sideline the Fund, he added: "I don't want to discuss extra issues, like the IMF does. If we need to take measures in the future, we will discuss them with our European partners. Our positions and the IMF positions are so chaotically different."
A working group chosen by Greece and its creditors is currently discussing further proposals and reforms Greece should take in order to keep the bailout programme, which has targets and goals for how fast Greece must reduce its deficit and grow its economy, on track.
Last week, Eurozone finance ministers expressed concern about the fact only two of 15 "milestones" had so far been reached.
Nevertheless, Katrougalos was confident a deal could be reached. "It will be a tough negotiation, but I am optimistic. Who in the EU would want another crisis now, since we have entered a phase of economic recovery?"