Greece finally backed down and asked for a six month extension to its EU bailout programme - but Germany said no. Greece's anti-austerity government had offered some concessions, but German officials called the proposal a 'trojan horse' - which would not guarantee Athens would pay back its existing loans.
Germany's finance ministry have 'rejected" Greece's proposals for an extension to its current bailout programme.
Ministry spokesman Martin Jaeger issued a statement stating the request from Athens for a six-month extension of Greece's loan agreement fell short of the conditions previously set out by Eurozone partners.
He said: "The letter from Athens is not a proposal that leads to a substantial solution.
"In truth it goes in the direction of a bridge financing, without fulfilling the demands of the program. The letter does not meet the criteria agreed by the Eurogroup on Monday."
Greece has reportedly pledged to honour all its debts as part of an official bailout extension request made earlier today.
The debt-ridden country has asked for a six-month extension of its bailout programme, and according to documents seen by Reuters agreed that they "will not take unilateral action to undermine the agreed fiscal targets" in the process.
The document said: "The Greek authorities honour Greece's financial obligations to all its creditors as well as state our intention to cooperate with our partners in order to avert technical impediments in the context of the Master Facility Agreement which we recognise as binding vis-á-vis its financial and procedural content."
Junior ministers and central bank officials are expected to discuss the details of the formal request by Athens to extend the country's 'loan agreement' in a teleconference later today. Euro zone finance ministers are then expected to discuss the request and make a decision in Brussels on Friday.
The Greek government has formally submitted a request for an extension to its existing loan agreement.
Government officials told Reuters today that they had asked for their bailout deal to be extended by an additional six-months.
Eurogroup president Jeroen Dijsselbloem confirmed he had received the request.
Greece intends to ask for an extension of its loan agreement with the euro zone on Wednesday, Reuters have reported, citing a source inside Brussels.
The source distinguished this request from Greece's wider bailout programme.
Speaking on condition of anonymity, the source said that Athens would request up to a six month extension but the conditions were still under negotiation.
George Osborne said European leaders were reaching "crunch time for Greece and the euro zone" and warned failure to reach a deal would be "very severe for economic and financial stability."
Echoing the alarm European Union officials have voiced about the negotiating tactics of Greece's left-wing government, the Chancellor added: "What Britain really needs to see is competence, not chaos."
EU finance ministers are today piling pressure on Greece to remain in an international financial rescue program as the euro weakened on fears of disruption when Athens' credit lines expire in 10 days time.
Greek Finance Minister Yanis Varoufakis said:
The next step is the responsible step. We will continue to deliberate, in order to enhance the chances and actually achieve a very good outcome for the average European.
Austrian finance minister Hans Joerg Schelling has said he expects a Greek request for an extension to their bailout agreement by Friday.
Schelling said "the only technical, legal solution is for Greece to request a bail-out extension."
Although Schelling was unclear as to when such a request would come he did state that he believed Greek's finance minister "will honour his commitments".
Greece's finance minister has said his country is "not playing games" when it comes to the current debt-crisis talks, because his country "don't have the right to play games with the future of Europe."
Speaking after failed talks between Greece and Eurozone finance ministers today, Yanis Varoufakis also said he believed that his country and others would eventually "meet halfway" and reach an agreement that will be accepted by all parties.
Greek's Finance Minister told reporters tonight that his country had originally been offered an acceptable deal by the EU Commisssion to cope with the country's current debt problem but it was withdrawn minutes before today's Eurogroup meeting.
ITV News' Europe Editor James Mates tweeted Varoufakis' comments:
FinMin #Greece says EU Commission offered him deal he could accept. But that document withdrawn by Eurogroup minutes before meeting began.
Greek finance minister Yanis Varoufakis has said he believes that "any notion of an ultimatum" over the current Greek bailout agreement will be withdrawn in the coming days.
Speaking after today's failure of Eurogroup leaders to agree what should be done over Greece's current debt crisis Varoufakis indicated his country would not be pressured into agreeing an extension to their bailout.
He said: "We want an honourable settlement."