Local media interpreted the statement as a first time public acknowledgement of talks across Europe over a "haircut" above the 21 percent agreed in the July 21 eurozone summit.

"We negotiate in every way to ease the debt. It is a major negotiation and this is the problem," said Papandreou during a regular cabinet meeting in Athens, according to a statement released to the press by his office.

The Greek leader did not use the term "haircut", but expressed hope that during a new EU summit on October 23 and a G20 meeting on November 3, leaders will reach "bold" decisions to deal with the debt crisis that has hit hard Greece and affected other economies.

Papandreou held telephone conversations with the Managing Director of International Monetary Fund (IMF) Christine Lagarde and Luxemburg's Prime Minister and Eurogroup chief Jean-Claude Juncker over the past 24 hours and is due to hold a meeting with EU Council President Herman Van Rompuy in Brussels on Thursday.

Media reports have speculated that the final "haircut" on the Greek debt, if approved, could exceed 50 percent.