Greece could cut its public debt by 20 billion euros ($28.3 billion) if it bought back sovereign bonds at market prices as part of a rescue deal, German weekly magazine der Spiegel reported, citing finance ministry sources.

Under this scheme, the European Financial Stability Facility (EFSF) would give Greece money to buy back bonds from private investors, the magazine said on Saturday in a release ahead of publication.

A bond buyback is more likely than the other options that euro zone finance ministers have discussed, der Spiegel said, citing unidentified sources in the ministry. Those options have included a bond swap with a hair cut and the extension of maturities of existing debt.

Both models are considered less likely to lead to a consensus than the buyback program, according to information from the ministry, the magazine said.

On Thursday, Greek newspapers -- citing anonymous sources -- reported that Athens saw a buyback of Greek bonds by a euro zone bailout scheme and private sector involvement in exchanging bonds as the two most likely solutions to its crisis.

One of the most likely options in the eyes of the Greek government is for a bond buyback worth 15 billion to 40 billion euros at a discount of 30 percent, two newspapers said.

Euro zone officials have rattled markets by struggling to reach a deal on how to involve private sector investors in tackling Greece's debt mountain, a key demand of Germany before it signs off on more support for Athens.

Germany's finance ministry was not immediately available for comment.

(Reporting by Annika Breidthardt, editing by Jane Baird)

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