PM Antonis Samaras made the extraordinary proposal in an attempt to prove Athens is serious about tackling its three-year crisis.
He declared, “On condition that no national security problem is posed, some of the islands could be used commercially. This is not, in any way, about selling them off cheap, but about transforming unused terrain into capital that could generate revenue, at a fair price.”
Greece has more than 6,000 islands, but only “un-inhabited” sites would be made available.
Its historic Attica coast — which boasts famous ruins — could also be up for grabs, joining railways and airports in a massive privatisation drive.
If Mr Samaras’ suggestion is carried out it will act as a huge shock to millions of Greeks, who would effectively be witnessing their country being leased off to the highest bidder.
It comes as Samaras tries to persuade euro bosses to give Greece two extra years to repay £188 billion in bailouts.