Greece has failed to agree to the latest creditors' proposal aimed at ending the Greek impasse, the head of the eurogroup has confirmed.

The finance ministers held their fourth emergency meeting in less than a week in Brussels aimed at unlocking new funding for Greece and averting a fast-approaching debt default next week.

“The only thing we have presented to the eurogroup is what the institutions have made together. We don’t have agreement from the Greeks on that. So we will have to hear in the eurogroup meeting from the Greek side, what their ideas are, what they can agree to, what they cannot agree to . . . We’ll take it from there,” President of the eurogroup Jeroen Dijsselbloem said on his way into the meeting.

Discussions recommenced at 9am on Thursday between the Greek prime minister Alexis Tsipras and the head of the IMF and European Central Bank after negotiations had broken up just after midnight.

But the failure of both sides to agree on a common proposal to end Greece’s escalating debt crisis ahead of the eurogroup meeting has cast major uncertainty about the prospect of a deal being struck on Thursday.

Speaking to reporters on the way into the leaders summit this afternoon, Taoiseach Enda Kenny said it was going to be difficult to get a conclusion to talks this evening. “I can see this going into the weekend but clearly we are in the closing hours to making a decision here.” He also said Ireland will not support debt relief for Greece.

While leaked documents show that both sides have made concessions in the area of VAT and pensions, the question of debt relief could be a key sticking-point in the discussions over the next few hours.

German chancellor Angela Merkel and other EU leaders are due to commence a leaders summit at 4pm in Brussels, which is now expected to be dominated by the Greek crisis.

“We are entering uncharted waters here, I honestly don’t know what are the chances to reach a deal today,” Slovakia’s finance minister Peter Kazimir said in a tweet ahead of the meeting.

Creditor institutions unanimously agreed on their own documents, an EU official said earlier, but Greece, which had put forth its own proposals, has not accepted the creditor plan.

Earlier, the head of the Bundesbank Jens Weidmann expressed serious concern about providing continued emergency funding to Greek banks in talks with his peers this week, a person familiar with the discussion said, as opposition grows to granting Athens a lifeline.

Mr Weidmann warned against the use of such emergency credit to prop up Greece’s banks ever since those lenders started to rely on it in February, but his latest protest is significant because of its timing.

“He has made his concerns clear from the start,” said the source said, adding that Mr Weidmann raised the issue this week in a telephone call among euro zone central bank chiefs and the European Central Bank’s executive.

Failure to close a deal by the weekend would increase the chance that Greece would have to impose capital controls to prevent a run on its banks. Greeks have withdrawn about 20 per cent of deposits held by the nation’s lenders this year as concern of an exit from the euro intensified. Even if a deal is reached, Mr Tsipras may struggle to secure the needed endorsement of the Greek parliament as some of the more populist and radical members of his ruling Syriza party are threatening to vote against the compromise plan he offered creditors this week.

Greece’s international creditors gave Athens an ultimatum to come up with a credible reform plan, warning they would otherwise put their own proposals to euro zone finance ministers for approval, a euro zone official said.

The official said the heads of the European Commission, the International Monetary Fund and the European Central Bank had given Mr Tsipras 9am Thursday to come up with a new, workable proposal of reforms. "If there is no deal by then, the institutions will send their own proposal to the eurogroup," the official said.

It is understood that the IMF in particular is unhappy with the balance of spending cuts and tax rises contained in the latest Greek proposal. While the Greek plan is proposing total fiscal adjustment of €8 billion over 2015 and 2016, the IMF fears that the plans are too dependent on tax increases.

Among the concessions being demanded by creditors are the earlier elimination of a supplementary benefit for low-income pensioners and the inclusion of restaurants and the catering industry in the higher 23 per cent VAT rate. It is also opposed to the various measures to increase corporate tax contained in the latest Greek proposals.

Any deal agreed in Brussels is expected to be scrutinised and voted on by the Greek parliament ahead of Tuesday.

Following more than six hours of talks between Mr Tsipras and the EU and IMF’s most senior officials on Wednesday, negotiators emerged empty-handed from the European Commission headquarters in Brussels, prompting the eurogroup meeting of finance ministers to be suspended after an hour.

Mr Tsipras returned to the negotiating table following the eurogroup meeting and resumed talks with Jean-Claude Juncker and other senior EU officials late on Wednesday night. However, that ended without progress, and the Greek prime minister and the heads of the three creditor institutions agreed to reconvene after a few hours’ sleep.

“It’s going to the wire,” Finland’s Alexander Stubb told reporters after the meeting of euro-area finance ministers in Brussels enm.

The new impasse caught investors off guard and stocks retreated around the globe amid concern the five-month Greek standoff will fester, with disagreement persisting over the conditions attached to a resumption of aid for Europe’s most indebted nation.

Additional reporting: Agencies