Greece said today it would not go ahead with a debt swap crucial to its second bailout if holders of less than 90 per cent of its debt to the private sector agreed to participate, failing to satisfy its international partners.

The statement comes after signs that the debt swap plan is facing delays, with between 60 and 70 per cent of bondholders participating so far.

Greece and banking lobby group IIF, which jointly coordinate the debt swap talks, had so far presented the 90 per cent participation rate as a simple target and not as a condition.

The condition applies to the holders of Greek bonds maturing by 2014 or 2020, the government said in a letter sent to finance ministers around the world, according to a statement it posted on the web site of the Athens Stock Exchange.

"If these thresholds (or either of them) are not met, Greece shall not proceed with any portion of the transaction described in this letter if it determines, in consultation with the official sector, that the total contribution of private sector creditors towards the financing needs of Greece and Greece's debt sustainability resulting from this transaction is insufficient to permit the official sector to support the new multi-year adjustment programme for Greece announced on July, 2011," the letter said.

Reuters