Any solution for further reducing Greece's debt burden must be voluntary, a Greek government official said on Sunday following a meeting of EU leaders to try to find a solution to the region's debt crisis.
Private sector holders of Greek government bonds agreed in July to take a 21 percent write-down in the value of their holdings to reduce Greece's debt burden. But it is not sufficient and talks are now focused on a deeper write-down, possibly 50-60 percent, although it is unclear if that would be accepted voluntarily.

"A basic element of the decision is that it must be on a voluntary basis," to avoid a credit default and the triggering of CDS contracts, the official said on condition of anonymity.

He added that the deepest write-down possible, while still retaining voluntary participation, was the overriding aim, to spare taxpayers in other European countries.

"We need to take corrective moves to make (the package) more balanced, to the benefit of the official sector and of Greece and not to the benefit of the banks," the official said.

Greece has already received 65 billion euros under its first, 110 billion euro ($150 billion) EU/IMF bailout agreed last year. Germany alone, which is insisting that bigger losses are imposed on private bondholders, has paid about 10 billion euros of that.

But fiscal slippage and foot-dragging over privatisations and reforms have caused the country to need a second bailout, set at July at 109 billion euros, an amount that now may have to be revised upwards.

"The additional contribution of the official sector, which is subject to approval by national parliaments, should be as limited as possible and the participation of the private sector should be as generous as possible," the official said.

A debt sustainability study by international lenders showed that only losses of 50-60 percent for private bondholders would make Greek debt sustainable in the long term. A senior German banker close to the talks said bank negotiators had offered to take a 40 percent writedown.