BRUSSELS (Reuters) - Greece and its euro zone creditors have reached a deal on many, but not all, issues in the programme that Athens is implementing in return for loans, the head of euro zone finance ministers Jeroen Dijsselbloem said on Sunday.
Greece needs the euro zone to give a positive review of its reform progress to get the next, 2 billion euro ($2.15 billion) tranche of loans as well as up to 10 billion euros to help recapitalise its banks.
But talks, which should have been completed by the middle of October, have stalled because of differences over details of a foreclosures law.
"I welcome that good progress has been made between the Greek authorities and the institutions in the discussions on the measures included in the first set of milestones and on the financial sector measures that are essential for a successful recapitalisation process," Dijsselbloem said.
"Agreement has been reached on many issues," he said.
He said deputy euro zone finance ministers in the Euro Working Group (EWG) would meet on Tuesday to decide if a disbursement is possible.
A euro zone official said the foreclosures law remains a stumbling block. Athens and euro zone creditors differ over the level of protection required for poorer families in danger of losing their homes.
Euro zone officials believe Greek proposals are too generous, but for the left-wing government of Alexis Tsipras, the problem is highly sensitive given that Athens is to provide food and housing for thousands of asylum-seekers under a plan to handle the EU's migration crisis.
"The aim of the government is for there to be protection of primary homes (from foreclosures) that will cover 60 percent (of households in trouble)," said a Greek government official as marathon talks with lenders continued late into Sunday.
"There will be safety valves to protect households that were meeting their obligations but are unable today to continue their loan payments. But they must be willing to cooperate."
The official said the two sides were discussing measures to exclude "strategic defaulters", borrowers who can afford to service their debt but are not doing so, taking advantage of a moratorium on home foreclosures.
There will also be a cap on the number of foreclosures banks can make annually.
Greek officials say a wave of evictions under a less generous law could boost support for the far-right Golden Dawn party and depress property prices as homes are auctioned off, further diminishing the value of mortgage collateral for banks.
But Dijsselbloem said last week the foreclosures law must be passed before banks could be recapitalised, because it had a direct impact on the number of bad loans that banks would have to deal with through recapitalisation.
"They are trying to finalise the whole package later today, otherwise tomorrow," the euro zone official said.
"After stock taking in the EWG, in principle the ESM (European Stability Mechanism) board of directors can decide on disbursements," the official said.
($1 = 0.9285 euros)
Reporting by Jan Strupczewski and George Georgiopoulos in Athens; Editing by Ruth Pitchford