LONDON (REUTERS) - Greece plans to return to bond markets in the second half of next year, Finance Minister Euclid Tsakalotos said on Tuesday (Nov 10).

The country, which came perilously close to leaving the euro zone this year after tense negotiations over an 86 billion euro (S$131 billion) bailout with international creditors, has not issued debt to private investors since July 2014.

Speaking on the sidelines of an event in London, Mr Tsakalotos told Reuters he had met hedge funds on Tuesday to discuss issues including a possible return.

"It was a general overall issue of the roadmap, the Greek economy, how the (bank) recap is going and when we expect to return to markets and so on," he said. "There are of course lots of investors who would be willing to invest but are frightened about Grexit and that the programme might not work."

Greece's international creditors have promised Athens further debt relief if it complies with the terms of the bailout, its third since 2010.

Mr Tsakalotos, one of the key negotiators in the latest bailout deal, said he doubted debt relief would come in the next months but would be crucial to winning back investors.

Greece has effectively been locked out of markets since it became clear to investors at the end of 2014 that the leftist Syriza government would gain power on a promise to end austerity and renegotiate its debts.

"We will not reach a deal of debt relief before Christmas," Mr Tsakalotos said. "It is absolutely vital that we get a clear runway so that people understand that investors can invest for seven, eight, nine years."

He said relief on its debts to international creditors should include grace periods where no interest is paid for 15 to 20 years, which would improve its finances and encourage long-term investment from private investors.

"If there is good will, there are tonnes of ways to deal with the problem."