The remarks were the latest signs of hardening positions among Merkel's ruling conservatives towards Greece, as politicians run out of patience after months of fruitless wrangling over what reforms Athens is willing to deliver.

Michelbach warned against "lazy, political compromises" and further delays to a solution to Greece's debt problems. He also rejected extending the current bailout programme.

"If the EU lets the government in Athens get away with its intransigence, we can bury the euro," Michelbach said in a statement on Sunday.

"Either Greece declares itself willing for a viable solution or the country must leave the euro. The euro zone could cope with the consequences of a Greek exit," he said.

He also called on the European Central Bank to immediately stop providing emergency credit to Greece since the Greek government had refused to fulfil its existing agreement.

Another CSU politician, Hans-Peter Friedrich, also urged Merkel to stand firm.

"A dishonourable spectacle is occurring: 27 EU countries are letting Alexis Tsipras lead them around by the nose," he said in a preview of comments due to appear in daily Bild on Monday.

"Whoever agrees to loosen the debt criteria now, will open the floodgates forever. Instead of being afraid of being isolated in the Greece question, Germany needs to find allies for a tough stance against Greece," Friedrich said.

Merkel has said she is willing to do all she can to keep Greece in the euro zone, but has insisted the onus remained on Athens and its creditors to break a deadlock and reach a deal.

Despite this, Greek Finance Minister Yanis Varoufakis said Merkel will face a "stark choice" on whether to strike a deal to save Greece from bankruptcy.

European Parliament President Martin Schulz, a member of the opposition Social Democrats, also warned Athens against breaking with the euro zone.

"What won't work is leaving the euro zone, not paying back its debts, but then expecting that funds from the EU budget will continue to gaily flow," he told the Frankfurt Allgemeine Sonntagszeitung.

Even Germany's business community appeared to be losing patience, with the head of the German Insurance Association warning against a "set of false promises".

"Keeping Greece in the euro zone should not become an end in itself," Alexander Erland said in advance comments due to appear in the Tagesspiegel on Monday.

(Editing by Digby Lidstone)

By Caroline Copley