Eurozone ministers have told Greek leaders to draw up improved economic reform proposals, after a Eurogroup meeting was "indefinitely suspended" this afternoon.
The news came after Greece's creditors sent a new proposal to the Eurogroup which, it was hoped, could form the basis of an agreement between Greece and its lenders.
Reports suggested the new proposals included concessions to Greece, allowing them to impose 13 per cent VAT on "basic" food (in a draft leaked yesterday, creditors had changed the word to "unprocessed").
European markets jumped on the news, with the FTSE 100 reversing earlier falls to rise 0.08 per cent, while Germany's Dax rose 0.71 per cent. In Athens, stocks rose 0.34 per cent.
Negotiators were back around the table this morning, as the deadline loomed for Greece to pay IMF €1.6bn (£1.1bn) on 30 June.
Although reports from the FT suggested Greek Prime Minister Alexis Tsipras had been given a deadline of 11am Brussels time to reach an agreement, that time came and went without any news.
As he arrived at the European Commission ahead of yet another Eurogroup meeting this morning, Austrian finance minister Hans Joerg Schelling said Sunday was the final deadline to reach an agreement.
Yesterday's leaked draft document showed dozens of lines of changes to Greece's original reform proposals. Earlier, Tsipras had vented his frustration, telling aides that creditors "either don't want an agreement or they are serving specific interest groups in Greece".