Early election, referendum possible if Greek debt plan rejected - Varoufakis

ROME (Reuters) - Greece could call a referendum or have early elections should its euro zone partners reject its debt and growth plans, Greek Finance Minister Yanis Varoufakis said in a newspaper interview on Sunday.

The new Greek government, led by Alexis Tsipras, won an election in January promising to renegotiate a bailout agreed with the International Monetary Fund and its European Union partners that requires strict budget discipline and sweeping economic reforms.

The government reached a temporarily deal with its lenders last month and Athens has until the end of April to specify the reforms it will make in exchange for further aid. Euro zone finance ministers are meeting on Monday in Brussels to discuss a letter of pledged reforms sent by Athens last week.

Should Brussels ultimately reject Greece's proposals, Varoufakis told Italian daily Corriere della Sera: "There could be problems. But, as my prime minister has said, we are not yet glued to our chairs. We can return to elections, call a referendum."

He did not say what the referendum would be on, but there has previously been speculation that an impasse might force the Greek government to hold a public vote on whether to continue to accept EU strictures, a move that could raise questions about Greece's place in the euro zone.

In the interview, Varoufakis said that the response so far by euro zone partners to his proposals to replace its current debt with bonds linked to nominal growth is "silence."

"I'd like for Europe to understand that this would be a way of paying back more money, not less," Varoufakis said of the growth-linked bonds.

With the government's popularity level above 40 percent, Varoufakis said "people understand" that the government is fighting the "establishment that said it was saving Greece while it put everything on the backs of the poor".

In 2011, Greece nearly tipped the entire euro zone into a debt crisis until it accepted the bailout. Now the concern is that the failure of Greece to reach a new deal with lenders will throw the euro region back into crisis.

There has been growing uncertainty over Greece's cash position. It faces a decline in tax revenues, while aid from EU/IMF lenders remains on hold until Athens completes promised reforms.

In the same interview, Varoufakis said that the state had the money "to pay pensions and public administration salaries" and he said Greece does not need a new, third loan to pay its bills.

He also criticised the European Central Bank for being a "disciplinary" in not letting it issue short-term debt, and said the central bank should buy Greek debt as part of its bond-buying programme right away and not this summer, as it has said it would.

(Editing by Jeremy Gaunt)