Greece's government cannot accept a five-month extension of the bailout as proposed by creditors because it would deepen a recession and ultimately bring the nation back to a new round of crisis talks, a government official said on Friday. 

"The institutions' proposal to the Greek government was for it to legislate deeply recessionary measures as a condition for funding for five months, which is deemed inadequate," the official said. "The government does not have a popular mandate nor a moral right to sign up to a new bailout."

Athens' proposal to have the European bailout fund take over Greek debt by the European Central Bank was declined, the official said.