Extension of rescue loan denied by Greece

"There will be no extension of the (loan) agreement – we state this categorically, and of course there is no question of extending the loan repayment period," government spokesman Giorgos Petalotis said.

In Brussels, European Commission spokesman Amadeu Altafaj Tardio added: "There is no discussion, there is no plan, no preparations for any eventual extension of the current loan arrangement with Greece."

Greece narrowly avoided bankruptcy in May, when it began receiving rescue loans worth 110 billion euro (93.8bn) over three years from European countries and the International Monetary Fund.

In return for the loans, Greece has imposed punishing austerity measures to try to force down its hefty budget deficit, including wide-ranging labour reforms which sparked protests this week.

Late yesterday, 5,000 supporters of a Communist-back labour union marched through central Athens to protest against the austerity measures.

Earlier, more than 1,000 public service contract workers demonstrated outside Parliament and the Supreme Court, demanding permanent contracts and full employment benefits, despite a 2010 state recruitment freeze.

The contract workers' groups are currently fighting the government in court, with the Supreme Court due to hear a landmark case on January 20.

The rallies occurred amid ongoing protests by truck drivers and workers at Greece's state railway company against the overhaul of labour rules that includes liberalising so-called closed shop professions.

Finance Minister George Papaconstantinou said the government deserved credit for facing down "vested interests and people who have had particular advantages over the years".

"We're in the midst of a very difficult journey," he said, speaking at an economy conference in Berlin.

"We've made a very good start. I think this is recognised by everyone."