Orphanides, who is also the central bank governor of Cyprus, said in a newspaper column published on Friday that dropping plans to force losses on private sector holders of Greek debt would "help restore trust" in the euro zone and lower the borrowing costs of other governments in the currency union.
The involvement of the private sector in the Greek bailout has eroded investor confidence in euro zone sovereign debt and raised pressure on borrowing costs, despite policymakers' efforts to reassure markets that Greece is an isolated case.
"Reversing the Greek private sector involvement decision would also raise the financing costs on the Greek government, but by restoring trust in the euro zone it would reduce the financing costs of other euro zone governments," Orphanides wrote in the Financial Times.
A 30-year low interest rate loan to Greece from other countries could accompany the reversal of private sector involvement, he said, helping to keep its financing costs in line with present fiscal plans.
An ECB spokesman declined to comment on whether Orphanides' views represented the position of the ECB as a whole.
However, the central bank warned government leaders when they set out on a path of private sector involvement (PSI) in 2010 that the policy posed a risk for investors' trust in sovereign debt.
One euro zone central bank official noted that Orphanides had published his comments ahead of fresh talks this month on Greek PSI and that Cypriot banks are heavily exposed to Greek sovereign debt.
Banks and investment funds have been negotiating with Athens for weeks on a PSI scheme under which they will accept a nominal 50 percent write-down on their Greek bond holdings in return for a mix of cash and new bonds.
"In the markets people are worried that they will come up with 70, 80 or 100 percent haircuts next," said Berenberg bank economist Christian Schulz, adding that Orphanides' comments would help limit Greek PSI to a 50 percent write-down.
But Schulz, a former ECB economist, doubted PSI in Greece would be dropped altogether.
"That would be great - that would certainly be a positive surprise," he said. "But I'm not expecting that to happen. I would see maybe a 20 percent chance of that. I think it would be extremely difficult to get through the German parliament."
Orphanides said that dumping private sector involvement in reducing Greece's massive debts may be the only way to convince markets that investing in the euro zone was again safe.
A deal struck at a Franco-German summit in Deauville, France, in October 2010, which would have ensured the private sector was involved more generally in future euro zone bailouts, was reversed in December. However, euro zone leaders have agreed that the Greek deal will be unique and not be repeated.
Orphanides said this was not enough and that private sector losses in Greece added to uncertainty and contagion risks.
"The Greek private sector involvement reinforced the idea that holders of euro zone sovereigns should be prepared to incur losses even under circumstances that would not necessarily trigger comparable losses for sovereigns outside the euro zone," Orphanides wrote.
The ECB has resisted political pressure to ramp up its bond-purchase program to ease borrowing costs for crisis-hit euro zone states, but it has used an ultra-long liquidity operation to pump almost half a trillion euros into the banking system.
Another ECB policymaker, France's Christian Noyer, said European sovereign debt sales have been going much better since the ECB started to extend the long-term loans to banks last month.
Equipped with cheap funds in large quantities from the ECB, Noyer said he expected banks to step up their lending to both companies and consumers and that they also had every capacity to buy government bonds.
"There is no reason why they should be timid about it (buying government bonds)," he told Europe 1 radio.
"Since the refinancing operations have gone well at the end of last year and the beginning of the year, I think that it is starting to work."
Commercial banks' overnight deposits at the ECB nonetheless hit a new record high of 455 billion euros, data showed on Friday, indicating banks prefer the safety of the central bank to higher rates they could get by lending to each other.
The euro hit 16-month lows against the dollar and sterling on Friday and hovered near an 11-year low versus the yen, with further declines expected as worries grow about a worsening euro zone debt crisis and sovereign funding pressures.