Syriza's central committee rejected the proposal by far left hardliners 95-75, with one blank vote. It also rejected calls to nationalize banks and hold a referendum that would give voters the power to reject any deal in Brussels with the EU and IMF over relief in exchange for more fiscal reforms.
This was just the latest push in Greece to miss an IMF payment. Last week, Nikos Filis, the leader of the party's parliamentary group, said Greece's cash crunch is so tight that it might not be able to make a June 5 payment of 300 million euros ($330 million).
Greece owes a total of 1.56 billion euros ($1.72 billion) in June. It has not received bailout aid since August and the European Central Bank has provided less help lately to Greek banks.
Party hardliners known as the Left Platform invoke non-payment as a matter of principle. Most Syriza officials, however, use the threat as a means to pressure lenders to provide immediate relief.
The party instead approved a text which claims the government will not sign a deal based on previous bailout agreements and rejects "ultimatums" by "the austerity fanatics." Still, Syriza believes a "mutually advantageous" deal can emerge.
Earlier Sunday, Left Platform leader Panayiotis Lafazanis, a cabinet minister overseeing energy, the environment and agriculture, declared that "it would not be a catastrophe to exit the euro (nor) a terrorist act not to pay the next installment to the IMF."
Lafazanis dismissed Prime Minister Alexis Tsipras' view that progress has been achieved in negotiations with lenders and said Greece has never been under such "harsh blackmail." He said lenders want to "annihilate" Greece.
Interior Minister Nikos Voutsis, a senior Syriza member who doesn't belong to the Left Platform, said in a TV interview Sunday that Greece can't pay the IMF installments.