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Greece's three-week-old government suffered its third casualty on Monday when the junior labour minister resigned in a dispute over the handling of key talks with EU-IMF auditors.

Nikos Nikolopoulos said he disagreed with the negotiation framework with the so-called “troika” of auditors from the European Union, International Monetary Fund and the European Central Bank who are holding talks with government officials on revising a massive bailout.

In a statement posted on his website, Nikolopoulos - from Prime Minister Antonis Samaras's conservative party - said “distortions” in labour and pension issues had to be addressed in the auditor talks from the start.

“The sole cause of my resignation is my personal belief that renegotiation with the troika and the correction of important distortions in labour, pension, social security and welfare issues should have been emphatically placed on the discussion table from the start,” Nikolopoulos said.

Greece's new conservative-led coalition government wants to amend some of the terms of its multi-billion EU-IMF bailout, including pay cuts and layoffs, which it blames for a deepening recession now in its fifth year.

But it has been forced to tread carefully as European peers have threatened to cut off further loan funds if promised reforms are not carried out.

Athens hopes to draw 31.5 billion euros ($38.7 billion) by September to pay salaries and pensions and recapitalise banks hit by a state debt rollover.

Nikolopoulos' resignation is the latest incident to plague the new government, a few hours after it secured a late-night vote of confidence in parliament by 179 to 121.

The designated finance minister fell ill shortly after the June 17 election and had to be replaced, and the deputy merchant marine minister was forced to resign a few days later in a conflict of interest case involving the ownership of an offshore company.

Samaras was also hospitalised for major eye surgery immediately after being sworn in, an operation that sidelined him for nearly two weeks. - Sapa-AFP