Greece rejects bailout extension

After days of often bitter negotiations the sides are struggling to reach agreement

Greece has rejected an offer from its creditors to extend the country's bailout deal as too little and likely to cause recession.

The country's international creditors made the new proposal so that it could avoid defaulting on its debt - providing it agreed to reforms.

The proposal would have released €15.5bn ($17.3bn) of funding, €1.8bn of which would have been available now.

A statement from the Greek government said it "cannot be accepted".

"The creditors' proposal to the Greek government would require introducing deeply recessionary reforms as a condition for the funding, which is totally inadequate, over the five months period," said the statement.

Greece and its creditors have been deadlocked despite the 30 June deadline for repayment of an IMF loan looming.

Greek PM Alexis Tsipras has called a meeting of the Greek government tonight to discuss the situation.

Earlier, he accused the lenders of blackmail, saying: "Europe's principles are not based on blackmail and ultimatums," he said. "In these crucial hours, nobody has the right to put these principles at risk."

German Chancellor Angela Merkel, however, had urged Athens to accept what she called an "extraordinarily generous" offer.

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