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Greek government suffers new casualty

Greece's three-week-old government suffered its third casualty today when the junior labour minister resigned in a dispute over the handling of key talks with EU-IMF auditors.

Nikos Nikolopoulos said he disagreed with the negotiation framework with the "troika" of auditors from the EU, IMF and the ECB who are holding talks with officials on a massive bailout.

In a letter released by media, Nikolopoulos said "distortions" in labour and pension issues had to be addressed in the talks from the start.

Greece's new conservative-led coalition government has been forced to tread carefully in its negotiations as European peers have threatened to cut off further loan funds if promised reforms are not carried out.

The resignation is the latest incident to plague the new government, which is conducting talks with its international creditors on revising the terms of its multi-billion-euro bailout.

The designated finance minister fell ill and had to be replaced shortly after the June 17 election and the deputy merchant marine minister was forced to resign a few days later in a conflict of interest case involving the ownership of an offshore company.

The new Greek Prime Minister Antonis Samaras was also hospitalised for major eye surgery immediately after being sworn in, an operation that sidelined him for nearly two weeks.