IMF says Greece needs extra €60bn in funds and debt relief

International lender issues strong message to Europe by warning that Athens' debts are unsustainable and it needs 20-year grace period on debt repayments

The International Monetary Fund has electrified the referendum debate in Greece after it conceded that the crisis-ridden country needs up to a60bn (42bn) of extra funds over the next three years and large-scale debt relief to create "a breathing space" and stabilise the economy.

With days to go before Sunday's knife-edge referendum that the country's creditors have cast as a vote on whether it wants to keep the euro, the IMF revealed a deep split with Europe as it warned that Greece's debts were "unsustainable".

Related: IMF tells Greece: no debt relief before reforms