Papandreou said Greece needed "support from the European Union and our partners to obtain credit on the markets at better conditions".

"If we do not receive this aid, we will not be able to enact the changes we foresee," he said.

Rising tensions

Papandreou will hold talks with Merkel later on Friday to seek support from the leader of the eurozone's biggest economy as he struggles to bring down his country's budget deficit.

Bruederle's Free Democrats (FDP) share power with Merkel's conservatives and the party has led government resistance to any aid for Greece.

Each EU state was responsible for its own affairs and Athens had to implement its austerity plan effectively, said Bruederle.

Most Germans oppose the idea of taxpayers bailing out Greeks, who they think have been living beyond their means for years.

The German government's cautious approach, and hostility from the FDP, has stoked tensions between the two nations.

Some German politicians say Greece should sell some of its islands [GALLO/GETTY]

On Thursday, two German politicians suggested Greece should consider selling some of its uninhabited islands to raise cash for its debts.

Josef Schlarmann, a senior member of Merkel's Christian Democratic Union, and Frank Schaeffler, a finance policy expert for the FDP, made the comments in an interview with Germany's Bild newspaper.

"Those in insolvency have to sell everything they have to pay their creditors," Schlarmann said.

"Greece owns buildings, companies and uninhabited islands, which could all be used for debt redemption."

In Greece, some politicians have demanded Germans pay reparations for the Nazi occupation during World War Two.

More strikes

Greece drew strong demand for a bond issue on Thursday, just one day after Papandreou's government unveiled a $6.5bn package of additional austerity measures.

But markets are still nervous about the prospect of a Greek bankruptcy and the impact on the eurozone.

Greece's main private and public sector unions began a strike on Friday to protest against the latest government cuts. 

Merkel, along with the European Commission, European Central Bank and other EU governments, has welcomed Greece's latest measures, but has also said financial aid will not be on the table on Friday.

However, leaving Greece to fend for itself risks unnerving markets further and the chance that the country's troubles could then spread to other eurozone states such as Spain or Portugal

European government sources have said Germany and France are working on contingency plans under which state-owned financial institutions would directly purchase billions of euros in Greek bonds or offer guarantees to commercial banks that bought them.

In Friday's article, Papandreou told the Frankfurter Allgemeine Zeitung he had never sought a bail out.

"We have not asked German taxpayers to pay for our pensions and holidays," he said.

"That there is European support so that we can borrow money under better conditions. That is all we need."