The EU cancelled a planned summit of 28 heads of state and government on Sunday to decide whether Greece stays in the European single currency, as a divided eurozone struggled to reach a reform-for-bailout deal.

The summit had been billed as a last chance to stop Greece crashing out, but was scrapped as eurozone finance ministers returned Sunday to marathon talks after failing overnight to overcome distrust with Greece's leftist government.

With Greece facing growing misery from capital controls and fears its banks could collapse within days, a meeting of the leaders of the 19 countries that use the euro was still due to go ahead in Brussels on Sunday.

"I have cancelled EUCO (the European Union summit) today," European Council President Donald Tusk tweeted. "Eurosummit to start at 1400 GMT and last until we conclude talks on Greece." The talks on Saturday ended with deep divisions about whether to trust Greece's radical Prime Minister Alexis Tsipras with a third bailout worth more than 80 billion euros ($89 billion), following months of wrangling.

Germany floated a plan for a temporary "Grexit" from the euro while Finland reportedly decided flat out not to accept a new Greek rescue program, causing panic.

Their downbeat assessment came despite Greece's international creditors calling Athen's new proposals a positive step forward after months of wrangling on a follow-up to two previous bailouts in 2010 and 2012 worth 240 billion euros. The proposals - including pension cuts and tax hikes that had been largely rejected by Greeks in a referendum a week ago - were approved by the Greek parliament in the early hours of Saturday.

The European Central Bank is providing emergency liquidity to keep Greek banks afloat but has frozen the limit, with fears that failure to reach a deal could cause it to shut off the taps completely.

Russia is considering sending direct deliveries of fuel to Greece to help prop up its economy, Energy Minister Alexander Novak said Sunday, quoted by Russian news agencies.

"Russia intends to support the revival of Greece's economy by broadening cooperation in the energy sector ... we are studying the possibility of organizing direct deliveries of energy resources to Greece, starting shortly," Novak told journalists.