Moody's on Wednesday cut Greece's credit rating by three notches to an extremely speculative level on debt restructuring worries and warned that more downgrades could come.

Citing a growing risk that the government will fail to stabilize its debt position without a debt restructuring, Moody's cut Greece's rating to Caa1 from the previous level of B1, bringing it seven notches into junk territory.

The outlook on the new rating is negative, in a sign that another downgrade is likely in the short- to medium-term.

"The first trigger for today's downgrade is Moody's view that Greece is increasingly likely to fail to stabilize its debt ratios within the timeframe set by previously announced fiscal consolidation plans," the ratings agency said in a statement.

Moody's  also cited as a key trigger the increased likelihood that Greece's lenders, the European Union and International Monetary Fund, would at some point require the participation of private creditors in a debt restructuring as a precondition for funding support.

"(The downgrade) is influenced by intense rumour in the media and overlooks the Greek government's pledges to achieve its fiscal targets for 2011 and to accelerate privatisations.”

"Taken together, these risks imply at least an even chance of default over the rating horizon," Moody's said.

The move takes Moody's rating of Greece three notches below Fitch's B-plus and two notches below Standard & Poor's B rating.

Greece's Finance Ministry criticized the downgrade, saying it did not take into account the government's efforts to put its finances back on track.

The downgrade "is influenced by intense rumor in the media and overlooks the Greek government's pledges to achieve its fiscal targets for 2011 and to accelerate privatizations," the ministry said in a statement.

Although French Finance Minster Christine Lagarde said restructuring was "off the table," investors continue to watch for signs that Greece will default