ATHENS: Greece's left-wing government said Wednesday it was in a "tough battle" with its bailout creditors over their demand to reduce protections for distressed mortgage holders.

A sharp rise in bad loans on banks' books due to the financial crisis has emerged as a key issue in the country's attempted financial rescue. The creditors say home seizures should be easier to make so that banks can clear out the bad loans, while the government is concerned about exposing too many people to eviction.

Finance Minister Euclid Tsakalotos and several other Cabinet members met with representatives of the European Central Bank, International Monetary Fund, European Commission and European Stability Mechanism.

They discussed the spending cuts, tax hikes and economic reforms that Greece has passed so far as part of its new three-year, 86-billion euro bailout agreed on in August.

The government has promised to overhaul the country's troubled pension system and tackle the issue of non-performing loans as part of a long list of demands by bailout lenders in exchange for continued loan payouts and access to bank rescue funds by the end of the year.

Spurred by a surge in poverty and unemployment, bad loans rose from 4.6 percent of the total in 2007 to 34.2 percent at the end of last year, according to the Bank of Greece, with the figure for home loans at about 30 percent.

Mortgage holders with lower and middle incomes have been protected from home seizures during the crisis for primary properties valued at less than 250,000 euros ($285,000).

Government spokeswoman Olga Gerovasili said negotiations were focused on setting a lower level.

"This is a major issue which we are in a tough battle over. We have repeatedly stressed that we are committed to protecting primary homes," she told state radio.

She did not comment on reports in the Greek news media that the government was seeking a new protection limit at 200,000 euros, while lenders wanted the limit cut below 100,000 euros.

The government, re-elected in snap general elections last month triggered by dissent over the bailout, is required to make the reforms to overhaul the economy and improve public finances.