Greece has been warned of an impending "disaster" after crisis talks between the country's finance minister and Eurozone counterparts broke up without agreement in Brussels.

The country rejected a draft proposal put forward by European finance ministers that would see an extension of Greece's international bailout package.

Dutch Finance Minister Jeroen Dijsselbloem, who chaired the meeting, says Athens now has until Friday to request an extension or risk seeing the bailout expire at the end of the month.

If that happens the Greek state and its banks could face a looming cash crunch.

Mr Dijsselbloem says the best way forward is to extend the current programme - something Greece says it it is not willing to do.

Greece's Finance Minister, Yanis Varoufakis, said negotiations will continue, adding he has "no doubt" an agreement will be reached that would be "therapeutic to Greece and for Europe".

But he added his country will not implement recessionary measures such as pension cuts and VAT hikes.

Greece's anti-austerity Syriza government recently swept to power on a promise to scrap the bailout as it stands.

But with Greece running out of money, Maltese finance minister Edward Scicluna said the country faces "disaster" unless it extends the bailout, which is due to end on 28 February.

"Greece has to adjust, to realise the seriousness of the situation," he said.

"It all depends on the realisation by Greece of the real seriousness of the situation because time is running out."

Mr Dijsselbloem said a "positive outcome" was still possible if Greece asked for the extension by the end of the week.

He said further talks are dependent upon Greece requesting a bailout.

"Given the timelines we have...we can use this week but that is about it," he said.

"The general feeling in the Eurogroup is still that the best way forward would be for the Greek authorities to seek an extension of the programme."

Mr Varoufakis and other European finance ministers are scheduled to remain in Brussels for routing talks on the EU economy today.

Meanwhile, the Taoiseach says he hopes negotiations over Greece's bailout debt can prevent Athens from "breaking its contract".

Taoiseach Enda Kenny says he hopes negotiations will continue to be constructive.