AFP - Greece faces desperate options on its debt dilemma now putting the eurozone close to dangerous contagion, analysts said as borrowing costs for Portugal shot up on Friday and the euro plunged.

The feeling on financial markets is when, not if, Greece will appeal for a rescue from a threat of default by activating promised help from the EU and IMF which have teams here working on how a bailout would work.

Commentators in Athens are coming round to the view expressed for some time on international markets where signs of contagion towards a sovereign debt crisis, as feared by the IMF on Wednesday, edged up a notch.

At the Foundation for Economic and Industrial Research (IOVE), a private think-tank, general director Yiannis Stournaras, said: "The government must make an immediate appeal to the EU and IMF support mechanism."

This followed comments from analysts as bad news bore down on Greece on Thursday that "Greece will have to bite on the bullet", "Greece is running out of time" with debt falling due in May, Greece is caught in "a hellish week."

Lloyds Banking Group economist Kenneth Broux warned: "Events in Greece are close to spiralling out of control."

The rise in the interest rate demanded on the market to hold Greek debt reflected delay by the government in adopting the necessary measures, he said, saying a central problem was collection of taxes and VAT sales tax.

A shock announcement on Thursday from the EU statistics office that the Greek public finances are far worse than estimated, and that Greek data remains suspect, together with a ratings downgrade for Greece, is shaking the euro, raising borrowing costs for other weak eurozone countries, and worrying stock markets.

In early trading, the euro languished close to its lowest value for 12 months against the dollar at 1.3253 dollars.

The yield on Greek bonds remained extremely high at 8.773 percent, and the price Portugal has to pay to borrow surged to 4.922 percent.

The EU has put the Greek public deficit last year at 13.6 percent, from 12.9 percent, already an upgrade, estimated previously. But it also said on Thursday that this might rise again because Greek data might have understated overspending on several points.

Moody's credit rating agency downgraded Greek debt, which still qualifies as investment grade, but warned the rating could fall further.

The head of economic research at Eurobank EFG Group here, Gikas Hardouvelis, said: "Our foreign lenders would never want Greece to go bankrupt. They will lend us so we can repay our debts." Foreign lenders held 82 percent of Greek debt, he said.

At Fortis Bank in the Netherlands, chief European economist Nick Kounis said that the increased Greek public deficit figures put Greek targets for deficit reduction "under threat", even though Greece has insisted that it is holding to its target to slash the deficit by 4.0 percentage points this year.

"What is more, Eurostat expressed a reservation on the quality of the data reported by Greece." This meant that there was "not much visibility" on the true state of Greek public finances, he said.

"So it looks like a terrible situation just got worse."

And he warned that "the problems are not just confident to Greece.

He noted that Greece now intended to cut its deficit by a full 10.0 percent of gross domestic product in two years, an "unprecedented" effort.

Greece needed extra loans for next year, but probably even more loans for later.

However, the application even of the promised rescue package, worth about 45 billion euros (60 billion dollars) this year, faced difficulties, Kounis said.

These considerations had caused "a spectacular bond market sell-off in Greece, which also appears to be pulling the government bonds of other peripheral member states lower."

At Natixis investment bank, bond strategist Jean-Francois Robin has warned that some people in the markets hold that "Greece will find itself in Argentina's situation or be forced to reschedule its debt" in a reference to a default by Argentina in 2001 which had traumatic effects on the population.

City Index analyst Joshua Raymond told AFP: "The problem is that the amount of true Greek debt seems to be changing violently.

"As a result, there is not much investor trust in Greece right now and with yields on bonds rising out of control each day, the market needs Greece to come clean."