By Renee Maltezou and Lefteris Papadimas
ATHENS (Reuters) - Prime Minister Alexis Tsipras acknowledged on Friday that his government had made covert contingency plans in case Greece was forced out of the euro, but rejected accusations that he had plotted a return to the drachma.
Tsipras was forced to respond to the issue in parliament after former finance minister Yanis Varoufakis this week revealed efforts to hack into citizens' tax codes to create a parallel payment system, prompting shock and outrage in Greece.
The disclosure heaped new pressure on Tsipras, who is also battling a rebellion within his Syriza party and starting tough talks with the European Union and International Monetary Fund to seal a third bailout programme in less than three weeks.
"We didn't design or have a plan to pull the country out of the euro, but we did have emergency plans," Tsipras told parliament. "If our partners and lenders had prepared a Grexit plan, shouldn't we as a government have prepared our defence?"
He compared the plan to a country preparing its defences ahead of war, saying it was the obligation of a responsible government to have contingency arrangements in place.
He did not directly refer to Varoufakis' disclosure of plans to hack into his ministry's software to obtain tax codes. But Tspiras said the idea of a database giving Greeks passwords to make payments to settle arrears was hardly "a covert and satanic plan to take the country out of the euro".
Tsipras also defended his embattled former finance minister, who has continued to create headaches for the government since being ousted earlier this month.
"Mr. Varoufakis might have made mistakes, as all of us have ... You can blame him as much as you want for his political plan, his statements, for his taste in shirts, for vacations in Aegina," Tsipras said.
"But you cannot accuse him of stealing the money of Greek people or having a covert plan to take Greece to the precipice."
Dressed in a colourful paisley pattern shirt, Varoufakis sat listening to the question time debate.
BAILOUT TALKS START
Tsipras made his remarks as Greece began talks with the mission chiefs of the quartet of creditors - the European Commission, European Central Bank, IMF and the European bailout fund - to nail down a third bailout of up to 86 billion euros.
The session with Greece's finance and economy ministers took place at a hotel in central Athens rather than at government ministries, part of efforts to keep the visit by EU/IMF officials -- widely despised by Greeks -- discreet and less intrusive than in the past.
Finance Minister Euclid Tsakalotos said they discussed recapitalisation of the country's ailing banks and a target for the government to post a primary budget surplus of 3.5 percent in 2018.
"We also discussed the privatisation fund and explained our proposals on how revenue from this fund should be used to reduce debt and fund growth," Tsakalotos said. "There was convergence on some issues and not on others."
In exchange for the rescue loans, Greece has agreed to sequester 50 billion euros (£35.4 billion) of public assets in a privatisation fund to act as collateral on the deal.
Greece wants to wrap up talks on the bailout by mid-August so as to get aid flowing before a debt payment to the ECB falls due on Aug. 20. But delays in starting the talks this week and the complexity of the agreement could mean Athens is forced to rely on bridge financing from European lenders rather than funding from the bailout to make that payment.
Greece aims to reopen its stock market .ATG on Monday after a five-week shutdown due to the country's debt and economic problems. The bourse is still awaiting a finance ministry decree detailing new trading rules.