The country could use state-owned real estate assets as collateral for new bonds to raise more than 100bn euros, under a proposal put forward by a leading think-tank and a former conservative minister, newspapers reported.

The daily Kathimerini said the proposal would allow Athens, which has been shut out of bond markets, to convert a substantial share of its public debt into a new form of asset-backed bond.

The architects behind the proposal are leader of the Drasi party and former New Democracy minister Stefanos Manos and Yiannis Stournaras, director of the Foundation for Economic and Industrial Research (IOBE).

The plan would enable Greece, which expects debt to amount to about 162 percent of GDP this year, to reduce its public debt by 50 to 60 percent of GDP.

Under the proposed plan, Greece would set up 15 companies and transfer real estate assets including land and public buildings to them, Kathimerini said. Financial weekly Investor's World carried a similar report but said only ten companies would be created.

The firms would then issue long-maturity bonds backed by the real estate assets. The bonds could be bought by private investors, banks or even the euro zone's rescue mechanism, the EFSF, Kathimerini said.

The country could repay the bonds when they expire or at any time it has the cash, regaining ownership of the property assets. If the country failed to repay the maturing bonds, these would turn into shares of the companies owning the assets and bondholders would take ownership of the firms.

"Since the Greek state has the right to regain ownership (of the property), this won't be a taboo any more," the architects of the plan were quoted as saying to Investor's World.

The newspaper said that Greece's finance minister and Germany had been informed of the plan. The finance ministry was not immediately available for comment.

The country is struggling to sell stakes in state-controlled firms and real estate to meet a downwardly revised target for privatisation this year of 4bn euros, a key term in the bail out sponsored by the European Union and International Monetary Fund.

In a joint statement earlier this week troika inspectors said they would recommend payment of a vital aid tranche but identified privatisation and structural reforms as the weakest areas in which the debt-choked country should step up efforts.