Greece's private creditors are willing to improve their final offer of a four percent interest rate on new Greek bonds in order to clinch a deal in time to avert a messy default, Greek media said on Thursday without quoting any sources.

With time running short ahead of a major bond redemption in March, private creditors are now considering an average coupon of around 3.75 percent on bonds they will receive in exchange for their existing investments, the newspapers wrote.

The top negotiator for private creditors, Charles Dallara, returns to Athens on Thursday to resume talks with government officials after bankers discussed the plan in Paris on Wednesday, both sides said.

The interest rate on the new bonds has been the main stumbling block in the negotiations, with the IMF, Germany and other euro zone countries insisting it must be low enough to ensure that Greece's debt will be back on a more sustainable track by 2020.

In Paris, Charles Dallara talked with top bankers to determine their stance and, according to sources, they will submit a new improved proposal for an average interest rate of 3.75 percent, centre-left daily Ethnos wrote without naming its sources.

Another daily, Kerdos said participation of public sector creditors including the ECB in the swap deal was a pre-condition for that offer, which it said could bring the average interest rate to about 3.8 percent. Conservative daily Kathimerini said the new coupon could be lower than 4 percent and near 3.75 percent.

The chairman of BNP Paribas , one of the banks on the committee leading talks for creditors, however, suggested on Wednesday that bondholders would not retreat from their position easily.

The offer that is now on the table is the maximum acceptable for a voluntary deal, BNP Chairman Baudouin Prot said. All the elements are now in place.

The Institute of International Finance, which Dallara heads, said Thursday's discussions would be informal and aim to sort out all legal and technical issues quickly. But the focus is expected to also be on the interest rate.

Dallara left Athens over the weekend after the last round of talks proved inconclusive.

The European Central Bank has ruled out taking voluntary losses on its Greek bond holdings but is now debating how it would handle any forced losses and whether to explore legal options to avoid such a hit, central bank sources told Reuters on Wednesday.

(Reporting by Tatiana Fragou; Writing by Ingrid Melander; Editing by Toby Chopra)