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Greece reforms still lack substance: Official

Hopes of a deal between Greece and its creditors this weekend, after months of disagreement, were dampened Thursday, after a euro zone official told CNBC Thursday that reports of an imminent deal were misplaced.

It comes after various media reports suggested that Greece and its lenders were targeting a deal over its bailout in return for aid by Sunday, prompting hopes that the long-running negotiations could be nearing a breakthrough.

But that claim was dismissed by a senior euro zone official, who told CNBC that such reports were inaccurate.

"Reports of an agreement to aim for a deal on Sunday were a misunderstanding and not accurate," the source, who is close to the talks and did not want to be named because of their sensitive nature, said Thursday.

Pedestrians shelter from the rain as they wait for a tram in central Athens, Greece.
Angelos Tzortzinis | Bloomberg | Getty Images

The claims emerged Wednesday after a meeting of the awkwardly-named Eurogroup Working Group (a sub-group of the more senior euro zone finance ministers that make up the Eurogroup).

But the official said it was just a standard, monthly meeting at which Greece was only talked about "briefly, and not that much."

Lacking substance

Greece's negotiating team was reshuffled earlier this week, with Finance Minister Yanis Varoufakis now playing a smaller role in talks with lenders and euro zone partners, in a bid to speed up the discussions that appeared to have stalled.

The official told CNBC that the changes had helped talks, but that the substance of proposed reforms by Greece was still lacking.

"We are quite happy with the progress that we have seen. But progress has happened on process rather than substance, I would say," they added.

CNBC contacted several Greek government officials but no one was available to comment.

Read MoreGreek crisis: A step closer to aid deal?

Since 2010, Greece has received two financial aid packages worth some 240 billion euros ($258 billion), overseen by the European Union (EU), International Monetary Fund and European Central Bank (ECB).

Greece now has some major debt repayments looming in the weeks ahead, however, and additional fund are seen as key to avoiding a sovereign debt default that could trigger its exit from the euro zone. There has been much delay by Greece over reforms that are a pre-requisite to it receiving a final tranche of much-needed aid, however.

Technical talks between Greece and is creditors begin Thursday, and will continue throughout the weekend, and Greek Prime Minister Alexi Tsipras has expressed optimism that a deal with lenders could come before a crucial Eurogroup meeting of euro zone finance ministers on May 11.

Greece gets junkier

As the talks drag on, Greece's economy continues to struggle. Late Wednesday, ratings agency Moody's cut Greece's credit rating deeper into junk territory saying there was "high uncertainty" over whether the country will be able to reach a deal with its international lenders in time to meet upcoming debt repayments.

Read MoreWe should let Greece go bankrupt: Ifo's Sinn

"The significant implementation risks of a follow-up, medium-term financing program even if an agreement is reached, given the weakened economy and a fragile domestic political environment," Moody's said in a statement.

It downgraded Greece's government bond rating to Caa2 from Caa1 with a negative outlook. A Caa2 rating means the bonds are judged to be of poor quality and are subject to very high credit risk.

Tsipras U-turn?

Chief market analyst at Ava Trade, Naeem Aslam, said in note that Tsipras – who is under mounting pressure, with the Greek government coffers running dry – could be about to bow to creditors' demands.

"The most likely outcome of this situation will be Greece throwing in the towel and agreeing mostly to the creditors conditions," Aslam said Thursday.

Meanwhile, Christian Schulz, a senior economist at Berenberg bank, questioned whether a "big U-turn" by Tsipras' Syriza party was looming.

"Some media reports suggest that Syriza is indeed beginning to renege on its red lines, including the crucial labour reforms," he said in a note. "However, even if this U-turn materializes, Tsipras will face very tough resistance or even a rebellion from his most left-wing MPs and is likely to have to rely on opposition support."

- By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt. Follow us on Twitter: @CNBCWorld