Greece's private creditors have pleaded with European officials who rejected their bond swap offer to hammer together a deal before Athens tumbles into a chaotic default.

Athens' hopes for a swift deal with lenders were evaporating after euro zone ministers on Monday rejected creditors' demand for a four per cent coupon, or interest rate, on new, longer-dated bonds in exchange for existing debt.

The country is desperate for a deal to ensure funds from a 130 billion euro ($169bn) rescue plan drawn up by European partners and the International Monetary Fund arrive before 14.5bn euros of bond redemptions fall due in March.

"It's important that all parties recognise how much we have at stake and work together and co-operate to find a solution," said Charles Dallara, who negotiates in the name of private bondholders through the International Institute of Finance (IIF).

He declined to comment on whether his group would back down on the demand for a 4pc coupon billed as their "final offer" and said the position was already clear. Greece says it is not prepared to pay a coupon of more than 3.5pc which would impose steeper losses on its private creditors.

Senior euro zone officials suggested they were preparing for another drawn-out battle despite the ticking clock. They want to make sure any debt swap deal does enough to bring Greece's mountainous debts back on track, to avoid the prospect of having to once again stump up funds for Athens.

German Finance Minister Wolfgang Schaeuble dismissed talk of the IIF's "final offer" with: "That happens in every bazaar."

"You do not need to be impressed by that," he said. "At least I do not."

Without a deal, Athens will be forced into a non-voluntary, hard default that could push other weak euro zone members closer to the edge, although experts are beginning to wonder whether the threat of contagion is as severe as it once was after the European Central Bank flooded the banking sector with nearly half a trillion euros of three-year money in December.

Standard & Poor's will likely downgrade Greece's ratings to "selective default" whether a debt restructuring is achieved with the voluntary buy-in of private creditors or not, but the ratings agency said the ripples might not spread.

"It's not a given that Greece's default would have a domino effect in the euro zone," John Chambers, chairman of S&P's sovereign rating committee, said.

EU economic and monetary affairs commissioner Olli Rehn said the two sides remain close to an agreement on a Greek debt swap, which he hoped would come this month rather than next.

Caught in the middle between creditors and European partners stepping up a game of brinkmanship, Athens was left clinging on to hope a deal could still be struck in time. It said it had the euro zone's support to complete the talks in the "coming days".

"In reality, we are now entering the final stretch," Finance Minister Evangelos Venizelos said.

"I believe everyone has now realised that Greece must be supported in its effort, which is of vital importance not only for us but for the euro zone as a whole and the global economy," he added.-Reuters