Bond rating agency Standard & Poor's cut Greece's credit rating Monday, heightening concerns that Europe's debt crisis is getting worse.

The agency said it was increasingly likely that Greece would be given more time to repay its bailout loans and that it would negotiate a similar deal on bonds held by commercial investors.

S&P downgraded the Greek government's long-term bonds to B from BB-.

It said Greece might eventually have to resort to a partial default, reneging on as much as 50 per cent of its debt.

As a result, the agency said it could downgrade Greece again in coming months.

At the same time, European authorities they may have to increase their efforts to help Greece with its massive debts.

Last March, the European Union and the International Monetary Fund rescued Greece with a bailout worth $160 billion US.

Officials with the EU and the IMF were in Greece Monday to check up on economic reforms promised in return for the loans.

They will also examine whether the current program will be enough to allow Athens to stand on its own feet again when the loans run out in 2013 — a scenario most investors think is unlikely.

Though the country has enacted stringent austerity measures, started reforming the economy and announced a $73 billion privatization program, the public finances are no longer improving as much as hoped.

In particular, the government is having trouble raising revenue as the economy remains in recession. The upshot is a financial shortfall estimated at some $44 billion over the coming years.

With files from The Associated Press