Greek Prime Minister Alexis Tsipras accused international creditors of “blackmail” yesterday after eurozone partners warned Athens it had 48 hours to accept a cash-for-reform deal or plunge towards default next week.

But despite angry rhetoric on both sides, negotiations were continuing in Brussels to find a last-ditch compromise to keep Greece in the eurozone to avoid a political train-wreck, economic chaos and financial market disruption.

In a carrot-and-stick approach, the eurozone offered to release billions in frozen aid if Greece accepted and implemented pension and tax reforms that are anathema to its leftist government, elected in January on a promise to end austerity.

They also made a gesture towards Tsipras’s demands for debt relief by offering to reaffirm a 2012 pledge to consider stretching out loan maturities, lowering interest rates and extending an interest payment moratorium on eurozone loans to Greece, a senior EU official said.

Greece is set to default on Tuesday

However, a Greek government official rejected as “totally inadequate” the creditors’ offer to extend its existing bailout programme by five months, as the leftist premier flew home to Athens.

German Chancellor Angela Merkel and French President Francois Hollande met Tsipras on the sidelines of an EU summit to coax him to accept an offer to fill Athens’s empty coffers until November in return for painful reforms.

If Greece does not clinch an agreement at the weekend to unlock funds, it is set to default on an International Monetary Fund loan on Tuesday, possibly sparking a bank run, capital controls and raising doubts about its future in the eurozone.

Tsipras sounded defiant on leaving the summit, telling reporters Greece would fight for the European principles of democracy, solidarity, equality and mutual respect.

“These principles were not based on blackmail and ultimatums,” he said in English.

European Council President Donald Tusk retorted: “It is not political blackmail when we repeat day after day that we are very close to this day [June 30] when the game is over.”

Merkel said she and Hollande had urged him in a 45-minute private meeting to accept the creditors’ “generous” offer.

“We have taken a step towards Greece,” she said. “Now it is up to the Greek side to take a similar step.”

Both she and Hollande said today’s meeting of eurozone finance ministers would be the decisive moment for a deal since time was running out to secure German parliamentary approval in time to release funds needed to avert a Greek default.

The creditors laid out terms in a document handed to Greece on Thursday. It said Athens could have €15.5 billion in EU and IMF funding in four instalments to see it through to the end of November, including €1.8 billion by Tuesday if the Greek Parliament approved the plan.

The total is barely more than Greece needs to service its debts over the next six months and contains no new money. Any further funding would require a third bailout programme, which is politically impossible for the moment in Athens and Berlin.

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