The deadline for Greece's bailout has formally expired and the country is now in arrears on its international loan.

Mr Gerry Rice, Director of Communications at the International Monetary Fund (IMF), said in a statement "I confirm that the SDR 1.2 billion repayment (about €1.5 billion) due by Greece to the IMF today has not been received.

"We have informed our Executive Board that Greece is now in arrears and can only receive IMF financing once the arrears are cleared," the statement adds.

Eurozone finance ministers are due to reconvene in the morning to discuss the latest Greek government rescue proposal.

BBC reported earlier this evening that the country's deputy prime minister Yannis Dragasakis said his country asked the International Monetary Fund for more time to meet a €1.5bn debt repayment.

Greece this afternoon submitted a plan to its creditors for a two-year deal - just hours before it defaulted on a loan repayment to the IMF.

The proposal was announced in a statement released by the office of Greece's Prime Minister Alex Tsipras.

"The Greek government proposed today a two-year deal with the ESM (European Stability Mechanism) to fully cover its financial needs and with parallel debt restructuring," it said.

The statement added that Greece "remains at the negotiating table" and that Athens will always seek "a viable solution to stay in the euro".

The announcement came ahead of an 11pm Irish time deadline for the end of Greece's current bailout.

Eurozone finance ministers have held a conference call to discuss the proposal, and will hold another early on Wednesday.

In the Dáil, Taoiseach Enda Kenny welcomed the 11th hour bid by Athens to strike a deal:

The announcement came as German Chancellor Angela Merkel told lawmakers she did not expect any new developments on solving the deadlock today.

Mrs Merkel also said the consequences of the Greek crisis could be cushioned well and there was no need to fear the effects on the Eurozone.

The comments appeared to dash hopes of a last-minute deal before the bailout programme expires.

Mr Tsipras admitted on Monday night that his country was unlikely to meet the debt.

But in an interview with Greek TV, he remained defiant and rounded on the European Central Bank's decision not to raise its funding limit for Greek banks.

"How is it possible the creditors are waiting for the IMF payment while our banks are being suffocated," he said.

European leaders have warned that a referendum planned for Sunday is not about taking a bailout, but about Greece's future in the monetary union.

Demonstrators shout slogans during a rally organized by supporters of the YES vote to the upcoming referendum in front of the Greek Parliament in Athens. Image: Petros Karadjias / AP/Press Association Images

As the financial crisis deepened, it was confirmed that banks and the country's stock exchange would remain shut until 7 July, and the daily limit on withdrawals from cash machines would be limited to just €60.

Greek Opposition politician Dora Bakotannia says it is embarrassing:

IMF repayment deadline

Greek Finance Minister Yanis Varoufakis earlier confirmed that Greece did not intend to make the €1.6bn repayment to the International Monetary Fund (IMF).

It had been confirmed that Greek Prime Minister Alexis Tsipras had telephone contact today with European Commission President Jean-Claude Juncker, the head of the European Central Bank (ECB) Mario Draghi and European Parliament President Martin Schultz

A Greek official confirmed there were, what he called "initiatives" shortly after the Greek daily Kathimerini reported that Mr Tsipras was "evaluating" a proposal made yesterday by Mr Juncker.

It included options for debt relief and more help for Greeks on low incomes.

But the offer would also mean Mr Tsipras having to write to Mr Juncker and other EU leaders saying he accepted the rest of the deal that was on offer the previous weekend when talks broke down.

He would also have to change his position on Sunday's referendum, having previously urged Greeks to vote against the creditors' proposals.

Athens withdrew from negotiations over a new EU bailout package at the weekend after it was made clear it would have to impose austerity measures in exchange for cash.

Mr Tsipras was angered when the ECB then refused to raise the limit placed on emergency funding for Greek banks.