The mission chiefs of the European Commission, the International Monetary Fund, the European Central Bank and the euro zone's ESM bailout fund are in Athens for talks on a second set of measures Greece must enact to qualify for 1 billion euros by the end of the month.

Athens and its international lenders reached agreement on the structure of a new privatisation fund whose revenues will be used to boost investment and pay down the country's debt mountain, and which Germany and other creditors insisted on.

"The new fund will have a supervisory board which will be appointed by both the government and the lenders," a government official told Reuters.

Greece will pick three and the lenders two of the supervisory board's members but both sides will have veto rights, the official said.

The board will name the management of the new fund which will consist of the current privatisation fund (HRADF), the country's bank rescue fund (HFSF), real estate assets and state holdings in public utilities, the official said.

Prime Minister Alexis Tsipras' leftist government wants to speed up negotiations and open the way for talks on debt relief, which he urgently seeks to convince Greeks that their sacrifices are bearing fruit.

Talks on the reforms are expected to wrap up late on Friday so the EU and IMF mission chiefs can report to their institutions, another government official said.

MORE REFORMS

Greece and its lenders also agreed that the state will take a stake of at least 51 percent in the country's power grid operator (ADMIE), which is now fully owned by the dominant power utility PPC. The rest will be privatised, an Energy Ministry official said. PPC itself is 51 percent state-owned.

"We are already achieving significant victories in this hard negotiation with our lenders like the one we achieved yesterday by keeping ADMIE in state hands," Tsipras told parliament.

Athens halted the sale of a 66 percent stake in ADMIE after winning election in January. It agreed under a third bailout deal in August to either restart the tender or find other ways to open up the electricity market.

A 20-percent stake in the grid operator will be sold to a private investor and 29 percent will be floated on the Athens stock exchange, the Energy Ministry official said.

"We are open and we will try to have a European electricity transmission operator also participating as a minority shareholder," the official said.

ADMIE has a book value of about 900 million euros ($985.05 million) and Greece will appoint an independent valuator to assess the price it has to pay to PPC for the majority stake. It was not clear how the cash-strapped government would pay.

But Athens is still struggling to keep non-performing loans to small business and consumers out of the clutches of so-called vulture funds that buy loan books of distressed debt at a discount and try to recover the money.

Parliament and government sources said the latest reforms' bill will be submitted to parliament on Saturday. The government aims to secure parliament approval for this set of reforms on Tuesday to get the 1 billion euro tranche by Dec. 18.

It will then have to pass other reforms, including a major restructuring of the ailing pension system, to conclude its first bailout review and open talks for a debt relief.

(Additional reporting by Lefteris Papadimas; Editing by Paul Taylor; Editing by Janet Lawrence)

By Angeliki Koutantou