Fitch credit ratings agency on Friday downgraded Greek bonds to below investment grade with a negative outlook — a blow Athens called unfair given its painful efforts to restore battered public finances.

The agency said that while Greece's economic and fiscal performance has in many respects exceeded expectations, its heavy public debt burden renders fiscal solvency highly vulnerable to adverse shocks.

Fitch added that Greece looked unlikely to regain access to bond markets by 2012.

Debt-ridden Greece narrowly avoided bankruptcy last year through a three-year loan program worth €110 billion ($145 billion) from European countries and the International Monetary Fund. To secure the loans, the Socialist government took deeply unpopular austerity measures, cutting pensions and salaries while raising taxes and the retirement age.

Fitch said it was cutting Greece's rating by one notch, from BBB- to BB+, or junk status, which will further hurt the struggling country's ability to borrow. Ratings agencies Moody's and Standard and Poor's — both of which have already accorded Greek bonds junk status — have also warned of impending downgrades.

"The negative outlook reflects that public debt sustainability is still very fragile and renewed access to market financing uncertain," a Fitch statement said.

A series of ratings downgrades threw Greece into financial turmoil last year — and sparked a crisis for the euro — after the new government revealed misreporting of deficit figures that raised concern over Athens' ability to repay its debts.

The public debt is expected to peak at over 150 per cent of gross domestic product before receding, while the budget deficit stood at 15.4 per cent of GDP in 2009 — a gap the government says it reduced by six percentage points last year, despite a severe recession.

A Finance Ministry statement said the Fitch downgrade "cannot be justified" given the country's efforts at fiscal consolidation, reforms already implemented, those underway and an anticipated repayment extension for the €110 billion in loans.

"The progress in fiscal consolidation and in the field of structural reforms that together determine the medium-term sustainability of the Greek debt has been recently positively assessed by the European Commission, the European Central Bank and the International Monetary Fund," the statement said.

The downgrade cast further doubt on the government's stated intention to return some time this year to bond markets, from which it has been effectively blocked by prohibitively high interest rates that approached 13 per cent this week.

"While the IMF-EU program assumes that Greece attains market access in 2012, Fitch believes that in the current market environment a high degree of uncertainty surrounds this goal and unfilled financing gaps could resurface," Fitch said.