Greek Prime Minister Alexis Tsipras on Monday reshuffled his team handling talks with European and IMF lenders, a move widely seen as an effort to sideline embattled Finance Minister Yanis Varoufakis to a less active role in negotiations.

An anti-austerity economist who has angered peers with his brash style, Varoufakis is facing calls to quit after returning from a meeting of euro zone finance ministers in Riga isolated and empty-handed while Athens scrambles to avoid bankruptcy.

Tsipras and senior aides formally expressed support for Yanis Varoufakis at a meeting on Sunday and agreed the finance minister would supervise a new team negotiating a reforms deal with lenders, a government official said.

But Deputy Foreign Minister Euclid Tsakalotos - an economist well-liked by officials representing creditors - was appointed coordinator of the group, the official said, elevating him from his current position and giving him a more active role in the negotiations.

The latest developments suggested Tsipras was ramping up efforts to strike a deal with lenders to unlock aid so that Greece can avoid a default or national bankruptcy.

Greek two-year yields fell over 100 basis points to the day's low of 24.87 percent after the news, reversing an earlier rise.

"The Eurogroup meeting in Riga showed Varoufakis was more or less isolated and it seems that Tsipras has understood that," said Felix Herrmann, a market strategist at DZ Bank. "The market is a bit relieved...(that) his influence has decreased."

"I WELCOME THEIR HATRED"

Varoufakis, who became an instant celebrity in the early days of the Tsipras government with his tie-less look and blunt attack on austerity policies, has seen his star wane in recent weeks and critics have called him a liability in the talks.

At Riga on Friday, he was sharply criticized by other finance ministers for both his lecturing style and failure to produce reforms demanded by lenders.

He was later taken to task by media for failing to appear at a state dinner after the meeting. He responded by tweeting a quotation by former U.S. President Franklin Roosevelt which read: "They are unanimous in their hate for me; and I welcome their hatred."

Prominent conservative lawmaker Dora Bakoyannis was among those calling for his head, telling Skai TV that Varoufakis was a "drag" on the talks and that "the best thing he can do is to resign."

In another move suggesting a less prominent role for Varoufakis, his general secretary Nikos Theocharakis, who had been leading technical-level talks with the so-called Brussels Group of lenders, will now focus on drawing up a plan for growth to be the basis for a new deal with lenders in June.

George Chouliarakis, considered close to the powerful deputy Prime Minister Yannis Dragasakis, will take over responsibility for talks with the Brussels group.

In an effort to show that Athens is serious about giving lenders access to data, a new team was also set up to support EU and IMF officials gathering information in the Greek capital.