GREECE'S prime minister faces the daunting task of rallying reluctant political leaders behind unpopular wage and pension cuts demanded by lenders as the price for bailout money that is essential to avert a chaotic default. !

But even if Lucas Papademos (pictured) is successful in winning political backing for the reforms something he is likely to try face-to-face over the next day or so Athens faces other hurdles as it scrambles to wrap up talks on a €130-billion rescue plan and a bond swap deal before big bond redemptions come due in March.!

On the debt restructuring front, action by the European Central Bank and other public creditors to further cut Greece's debt is proving to be a sticking point as Athens and private bondholders converge on a deal, bankers and officials say.!

The debt swap is not expected to be finalised at any rate until Athens can first convince foreign lenders that it is serious about pushing through reforms to reshape the economy.!

Papademos, a technocrat appointed in November, was schedueld to meet the socialist, conservative and far-right leaders in his coalition as early as yesterday or today to win their blessing for reforms needed to secure the bailout, a government spokesman said.!

None of them want to be linked to painful reforms ahead of national elections expected as early as April.!

Worried about Athens' commitment to reform, the "troika" of European Union, European Central Bank and International Monetary Fund lenders have demanded it push through measures like lowering the minimum wage level and cutting holiday bonuses.!

But those demands have met resistance in Athens, where officials fear further cuts could deepen an already brutal recession and heap new burdens on long-suffering Greeks.!

The two sides still need to reach agreement on major issues like wages, pensions and the recapitalisation of banks on Thursday before Papademos can present the plan to political leaders, the government says.!

Athens is under pressure to wrap up the talks before a meeting of euro zone finance ministers on Monday to discuss the bailout package and the debt swap.!

"Today is a very important day," government spokesman Pantelis Kapsis told Greek MEGA television yesterday.!

"The discussions are very tough. On the one side, there is pressure to restore the economy's competitiveness fast. We are saying that there is clearly an issue of competitiveness. On the other hand, there is also the question of recession which is very important for Greece.!

On the whole, the lenders have demanded extra spending cuts worth about 1 per cent of GDP or just above €2 billion this year, including big cuts in defence and health spending.!

With the country dependent on bailout funds for survival, Athens acknowledges it has little bargaining power despite a public outcry against round after round of austerity that has driven up unemployment and spurred near-daily protests. Reuters