Greece has sought to convince the EU and IMF that its economic programme is back on track to unlock €8 billion in rescue funding needed to prevent it running out of cash next month.

Finance Minister Evangelos Venizelos tonight held a conference call with head auditors from a so-called troika of the European Commission, the International Monetary Fund and European Central Bank to finalise measures needed for Greece to meet its deficit cutting target.

An audit had been suspended in early September, with sources close to the mission citing lack of progress with reforms, placing the release of the €8 billion at risk.

But the Commission said after tonight’s talks that a full troika mission "is now expected to come back to Athens early next week to resume the review, including policy discussions".

A statement said “good progress” was made at the talks, and that technical discussions would continue in Athens over the coming days.

Venizelos will also hold talks with lenders this weekend in Washington at the annual IMF meeting, his ministry said.

The latest forecasts put out by the IMF today see Greece's public deficit coming in at 8% of national output this year, instead of the 7.6% agreed with lenders, and its economy contracting more than expected at 5%.

Greece has been under pressure to plug a budget hole of more than €2 billion to meet the terms of a €110 billion EU-IMF bail-out agreed last year. A new EU aid package worth €159 billion cannot be finalised without a positive conclusion to the latest fiscal audit.

Greece earlier raised €1.625 billion in a sale of three-month treasury bills with return to investors stable at 4.56%, the debt management agency (PDMA) said. But the debt-hit nation urgently needs the rescue funds before its money for wages and pensions runs out in October.

The government announced last week a new hefty property tax and is expected to make further cuts in the country's massive state payroll after the finance minister admitted there was "surplus" staff in the civil service.

Meanwhile in Lisbon, Portuguese Prime Minister Pedro Passos Coelho said his country may need fresh financial aid from the EU and IMF in the case of a Greek default.

Referendum on euro report 'nonsense'

Greece's debt load is expected to jump from roughly 150% of national output currently to nearly 190% next year, according to the IMF's latest forecasts.

There is widespread belief on financial markets that Greece will end up defaulting on its debts, and that this could have severe contagion effects on Italy and Spain, struggling to convince the markets they will be able to stay on top of their debts.

The Greek daily Kathimerini reported on its website late Monday that Prime Minister George Papandreou was considering calling a referendum on whether Greece should continue to tackle its debt crisis within the euro zone or by exiting the single currency.

A finance ministry official called the report ‘nonsense’, and Venizelos said Greece's participation in the euro zone and euro was a national strategic choice.

Euro break-up fears 'exaggerated' - Fitch

Credit rating agency Fitch says the euro zone is unlikely to break up despite the recent escalation of the debt crisis, and that steps towards a solution are already being taken.

"Concerns over the risk of a break-up of the euro zone are hugely exaggerated," said David Riley, Fitch's head of global sovereign ratings.

He said it was a case of "no going back" for the euro zone and its member states. Fitch said it remained confident that the European Central Bank would continue to intervene to prevent any sovereign default.

"If Greece or any other country in difficulty were to leave the euro zone it would not only be economically irrational, but if it occurred with the encouragement and acceptance of other member states it would set an unhappy precedent," the agency said.

"The commitment to the euro, far from being irrevocable, could be reversed, a process that would fatally undermine the credibility of the commitment of other member states."

Fitch also ruled out the idea of a full fiscal and political union as a solution to the crisis, saying the public support and political will for such a move did not exist.

The agency suggested a "third way" to secure the long-term viability of the euro including the establishment of a pan-European supervisory and regulatory structure for financial institutions.

The agency advocated "greater European oversight and co-ordination of domestic economic and fiscal policies with the ultimate sanction of an 'orderly' sovereign debt restructuring mechanism to ensure discipline on governments and lenders."

Riley said: "To this end, Fitch believes the proposed European Stabilisation Mechanism (ESM) and the introduction of collective action clauses in government debt issued from mid-2013 is a significant step in this direction.

"However, reform to the governance of the euro area is politically and technically complex and will take considerable time to put in place and to earn the trust of investors and acceptance of the public.

"In the meantime, the ECB has little choice but to continue to absorb more and more sovereign and bank risk on its balance sheet until and unless the EFSF is enlarged and made more operationally flexible, including potentially allowing it to borrow from the ECB as well as giving it greater operational independence."