Greece withdrew on Tuesday a proposed measure that would have enabled some tax dodgers to pay reduced penalties in return for disclosure, a finance ministry source said.
Wrapped into an investment bill in early March, the amendment offered reduced penalties of up to 80 percent on tax statements filed before 2007 if those concerned were prepared to now settle up with the state.
Such a possibility already exists but currently only applies to tax statements filed before 1991.
The move was presented as a way for the cash-strapped Greek state to recover some tax revenue it would otherwise have little hope of collecting.
Many of those who are liable have already filed for bankruptcy.
But the bill's disclosure by Greek financial site capital.gr sparked criticism because the measure would also benefit a host of affluent Greeks whose holdings are under investigation.
The best-known source of allegedly hidden wealth is the so-called Lagarde list, a document which identifies more than 2,000 Greek holders of Swiss bank accounts who are now under investigation for tax evasion.
The bank data was given to Greek authorities by former French finance minister Christine Lagarde, now head of the International Monetary Fund (IMF), in 2010 to help a tax evasion probe.
Capital.gr posted a headline which read: "Lagarde list depositors to receive an 80-percent penalty break."
A finance ministry source told AFP: "This is just one way of looking at it."
According to Greek reports, the draft bill was withdrawn at the behest of the country's creditors, the European Union, IMF and European Central Bank.
A succession of Greek finance ministers have faced criticism for failing to properly screen names on the Lagarde list, which was originally leaked by an HSBC employee and has been used by several European states to crack down on tax cheats.
Greek judicial authorities have successfully prosecuted two former ministers who failed to declare HSBC accounts contained in the list.