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Brussels - Greece on Tuesday posted a higher-than-forecast deficit for 2010 despite record spending cuts, sending the yields on its €330bn of debt to fresh record highs.
The EU's data agency Eurostat said last year's public deficit for Greece, the first eurozone state bailed out, shot up to 10.5% - well wide of original aims.
It tallied Greece's total public debt at the end of last year at €328.5bn - although nearly five months later, local estimates put it at around €340bn.
Athens had intended squeezing its deficit down to 8.1% of gross domestic product in 2010, from 15.4% in 2009.
That was part of a deal last year to overhaul its economy and slash public spending in return for a €110bn EU-IMF loan that saved the country from default.
A statement by the Greek finance ministry said the "deviation" was "mainly the result of the deeper than anticipated recession of the Greek economy that affected tax revenues and social security contributions."
It insisted that Greece's annual deficit reduction was the largest ever achieved by any eurozone state.
The last official estimate in Athens had been for 9.4%, which led Greek conservative newspaper Eleftheros Typos to calculate that the Greek government must make additional savings of some €8bn "to save this year's budget from a complete derailment."
A spokesman for the European Commission said that while the latest figures were "worrying," they were "reliable" and "getting better," noting that the Greek government plans to make budget savings of €26bn by 2015 and raise another €50bn by selling off state assets.
The government has said Greece could buy back some of its debt - now pegged by the EU at 142.8% of gross domestic product, almost 18 months worth of national economic output - provided enough money was raised from state asset sales.
Experts from the European Commission, European Central Bank and International Monetary Fund return to Athens early next month for a review before payment of the bailout's fifth instalment.
Eurostat's announcement sent the rate of return for investors on two-year Greek bonds rose to 23.237% from 22.207% at Friday's close while the yield on 10-year bonds climbed to 15.058% from 14.718%.
Investors have been demanding higher returns as concerns mount that Athens will be able to manage its debts without seeking to restructure them.
Athens has been locked out of long-term commercial money markets since accepting the international bailout, but currently plans to tap investors again next year.
A senior European Central Bank official, Finland's Erkki Liikanen, warned on Tuesday that debt restructuring would not be a panacea for Greece's financial ills.
He told the German daily Frankfurter Allgemeine Zeitung that Greece needs to "achieve a budgetary surplus," adding that "a restructuring would not change that."
He also underlined that restructuring would not in itself help increase economic growth.
Across the 17-state eurozone, which has also seen Ireland agree a €67.5bn international bailout and Portugal request its own aid package, expected to amount to some €80bn, the average deficit in 2010 fell to six percent, from 6.3% in 2009, Eurostat said.
That is still double the notional permitted limit under an EU agreement, the Stability and Growth Pact, that is currently being re-written to introduce financial sanctions for states that repeatedly breach shared targets.
Twenty-two of the 27 EU states were in deficit above the allowed 3% mark, with only Estonia recording a surplus and Sweden in balance.
The combined debt-to-GDP ratio for the eurozone increased from 79.3% at the end of 2009 to 85.1% at the end of 2010 - with 14 of the EU 27 coming in above the bloc's notional 60% limit on this category.
