COLOMBO, April 16 Reuters Sri Lanka on Tuesday rejected international bondholders39; proposal to restructure more than 12 billion in debt, putting at risk critical International Monetary Fund support and delaying its efforts to resolve a twoyearlong debt crisis.

Some of the proposal39;s baseline assessments and a lack of a contingency option in the case of continued economic weakness were two the main reasons the deal was not agreed, the government said in a statement.

Colombo said it hoped to hold further talks as soon as feasible but the immediate risk was that without a compromise in the coming weeks, the next tranche of allimportant IMF support money could potentially get delayed.

Sri Lanka has already struck a deal with its main government creditors, but an agreement in principle with bondholders was also needed to secure IMF Board approval for the next 337 million instalment of its 2.9 billion programme.

The government said one of the main stumbling blocks had been that the baseline parameters of the bondholders39; plan had not matched those embedded in its IMF programme.

It added that the bondholders39; steering committee that it has been negotiating with in recent weeks had not wanted to extend restricted discussions a key part of debt talks where they are held privately, behind closed doors.

As well as the divergence from the IMF, Sri Lanka disagreed with a proposal to link future repayments to bondholders to the country39;s macroeconomic growth, through…