by Our Foreign Desk

GREECE and its European creditors were due to discuss a last-minute proposal by Athens for a new two-year rescue deal submitted just hours before the country’s international bailout expired last night.

The defiant Syriza government had been buoyed by mass support as thousands rallied in Athens on Monday night against the EU’s bailout deal.

And Finance Minister Yanis Varoufakis stated that the €1.6 billion (£1.13bn) loan instalment due to the International Monetary Fund (IMF) by last night would not be paid.

But as the Star went to press, eurozone finance ministers were due to discuss Prime Minister Alexis Tsipras’s offer in a teleconference.

On Monday more than 13,000 people gathered in Athens to support him and denounce Greece’s creditors, as they chanted: “Take the bailout and go!”

Speaking on next Sunday’s referendum on accepting the eurozone’s deal of austerity measures, he said: “We ask you to reject it with all the might of your soul, with the greatest margin possible.

“The greater the participation and the rejection of this deal, the greater the possibility will be to restart the negotiations to set a course of logic and sustainability.”

The government has insisted that a No vote would not mean an exit from the eurozone or the EU, with Mr Tsipras saying that Europe would not dare kick Greece out. Mr Varoufakis went further, threatening court action if attempts were made to remove the country from the joint currency.

“The EU treaties make no provision for euro exit and we refuse to accept it. Our membership is not negotiable,” he said.

The government has imposed strict capital controls after a run on Greek banks set in over the weekend. All banks have been ordered to close for at least a week and account holders are limited to cash machine withdrawals of €60 (just over £40) per day.

The Finance Ministry said it would open about 1,000 bank branches across the country for three days from today to allow pensioners without bank cards to make withdrawals limited to €120 per week.