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Greek unions and employers' associations have blocked a critical element of a rescue deal put forward by the European Union, accusing negotiators of crippling the economy with wage cuts and tax rises that will undermine growth. In a joint letter to the Greek prime minister, Lucas Papademos, the employers and unions said a cut in the minimum wage was non-negotiable and the focus of talks should switch to the tax system, the complexity of regulation and corruption. Athens is under pressure to wrap up talks on a bond swap and a €130bn (£108bn) bailout to avert a chaotic default. But hopes of an imminent deal faded after eurozone finance ministers put off a meeting expected on Monday to finalise the rescue. The ministers may meet later next week instead, said its head, Jean-Claude Juncker. The unions' and employers' statement undermined efforts by the coalition government to agree a package of reforms as demanded by the country's international lenders if Athens is to receive the crucial €130bn second rescue package. The three main parties in the coalition will meet on Saturday to discuss the situation, though sources close to the talks said a quick resolution was unlikely. The refusal of unions to accept further wage cuts and the discovery earlier in the week of an extra €15bn hole in Athens's accounts are expected to force negotiators to rethink their tactics over the weekend. The troika of officials from the International Monetary Fund, European Central Bank and EU want Greece to agree a package of spending cuts and reforms before they release the fresh €130bn of funds.

MEANWHILE :

Snow and ice hits Britain as Europe freezes over Heavy snow and ice has raised fears of transport chaos on Sunday, with hundreds of flights cancelled and disruption expected on the roads.At Heathrow 350 flights - a third of today's total - were called off on Saturday even before the forecast snow began, while Gatwick also warned it could have to cancel services. The Met Office predicted up to six inches of snow and ice would fall overnight and early this morning, with temperatures falling to 10.4 Fahrenheit (-12C) and windchill making it feel significantly colder. It urged people to be prepared for heavy snowfalls.