The euro sank against the dollar on Thursday on persistent worries over the Greek debt crisis after Athens warned again that it could appeal to the International Monetary Fund for aid if none is forthcoming from its eurozone partners.

In late morning trade, the European single currency tumbled to 1.3648 dollars, before recovering to 1.3692 dollars, still down from 1.3735 dollars late in New York on Wednesday.

Against the Japanese currency, the dollar fell to 90.12 yen from 90.33 yen.

Greek Prime Minister George Papandreou warned on Thursday that Greece might have to resort to IMF aid and rejected a German call that eurozone nations in serious breach of fiscal rules should be expelled from the group.

His remarks raised the stakes over Greek pleas for greater help and the euro fell on the growing signs of tension between the two sides.

"This is where Europe must come in and say 'OK in this case we either can provide what an IMF would provide ... or in the end Greece may have to choose the option to go to the IMF'," Papandreou told the EU parliament in Brussels.

The euro had already come under intense pressure on Wednesday when Papandreou raised the prospect that Greece could seek help directly from the IMF.

EU bodies, such as the European Central Bank, have made clear that such an approach to an outside body would be unwelcome.

Some analysts say it would be a big embarrassment and could significantly weaken the credibility of the eurozone and its rules.

"All this talk of a bailout plan had been buoying the euro but the market now seems to realise that talking about a bailout and delivering one are two totally different things," said CMC Markets analyst Michael Hewson.

"German constitution and EU law prohibit bailouts and Greece's threat to go to the IMF merely highlights these problems more starkly," he said, adding: "The euro will continue to remain under pressure as any type of bailout plan could be illegal under EU law."

Economist Ben May, at British consultancy Capital Economics, said the issue of Greece was surrounded by uncertainties.

"Comments from Germany that Greece should look to the IMF for assistance highlight the uncertainties that remain about the form and timing of any Greek bailout," May said.

"Growing uncertainty about any bailout will keep the markets jumpy and could obviously make it tougher for the Greek government to roll over the large amount of debt that matures over the next couple of months."

In London on Thursday, the euro was changing hands at 1.3692 dollars against 1.3735 dollars on Wednesday, at 123.42 yen (124.05), 0.8944 pounds (0.8963) and 1.4476 Swiss francs (1.4475).

The dollar stood at 90.12 yen (90.33) and 1.0571 Swiss francs (1.0538).

The pound was at 1.5310 dollars (1.5319).

On the London Bullion Market, the price of gold rose to 1,123.05 dollars an ounce from 1,121.75 dollars an ounce on Wednesday.