The European Central Bank (ECB) disagrees with a central part of the Greek government's plan to deal with its crushing debt problem, the Financial Times reported on Tuesday.
Greek Finance Minister Yanis Varoufakis had suggested raising 10 billion euros in short-term Treasury bills, pending an agreement on proposed "smart debt engineering" to ease Athens' burden.
But the ECB will not approve the 10 billion euro debt sale, refusing to go above an existing cap of 15 billion euros on such debt issuance, the Financial Times reported, citing officials involved in deliberations.
Varoufakis is due to meet the ECB on Wednesday, the latest round of talks in a flurry of diplomatic activity after the radical Syriza-led government's election last month.
At the high-stakes meeting the ECB is to consider whether to continue providing emergency funding to Greek banks, sources have told AFP.
Stock markets rose across Europe on Tuesday after the radical new Greek government laid out its suggestions, which were taken as an indication that a unilateral debt cancellation was less likely.
The coalition government led by Prime Minister Alexis Tsipras' Syriza party surged to power last month after vowing to ease unpopular austerity measures imposed by international lenders in a 2012 bailout agreement.