The Greens are demanding a detailed report to parliament every time national debt increases by $50bn or more before they agree to remove the legislated ceiling on Australia’s debt, as negotiations continue with just over a week until the nation hits its credit limit.

The prime minister, Tony Abbott, ridiculed the former Labor government for negotiating the passage of legislation with the “economic fringe dweller” Greens, but now Treasurer Joe Hockey and Greens leader Senator Christine Milne are in personal negotiation to end the impasse over the debt ceiling – with talks scheduled to continue on Tuesday night.

The Greens and Labor refused Hockey’s demand that the debt ceiling be increased from $300bn to $500bn, saying a $400bn ceiling was sufficient and the government had given no good reason for the urgent need to raise it further.

Now the Greens say the important thing is the reason a government goes into debt, and under certain conditions they could agree to remove the debt ceiling altogether.

“The important thing is not the level of debt but the justification for it. The Greens want every single dollar of government debt to be justified and debated. We want more scrutiny not less,” Milne said.

“Everyone knows there is a big difference between a mortgage to buy a home and a credit card to splurge on luxuries, but when it comes to the national balance sheet the government hides what’s what. The public should know whether the government is incurring good debt to invest in our future, or bad debt to cover up a shortfall in revenue,” she said.

In return for removing the debt ceiling altogether, the Greens are demanding;

A statement to parliament every time the debt increases by $50bn or more, including justification for the debt, what the debt is being used to fund and the proportion of the debt required due to a decline in revenue and the proportion due to increases in spending.

Debt reporting standards to give information in the budget about gross and net debt at nominal and market value, and a breakdown of publicly guaranteed debt exposure. This would include guarantees to private sector entities such as banks but also off balance sheet debt held by statutory corporations like NBN or Medibank Private.

A breakdown of grants to state or local governments for infrastructure.

Changes to budget papers to extend the forward estimates from four years to 10 years to force the government to think beyond the current electoral cycle and future needs.

“After years of hysterical debate about the debt ceiling everyone is none the wiser about what the debt is actually being spent on. That is because the debt ceiling is little more than a political weapon and only pretence for genuine checks and balances,” Milne said.

Abbott has threatened to force parliament to continue sitting into the Christmas recess if Labor and the Greens continue to refuse to pass the debt ceiling increase, the carbon and mining tax repeal and the reintroduction of temporary protection visas to deny the chance of permanent residency to the 33,000 asylum seekers already in Australia.

Hockey told parliament he had fielded calls from international investors and rating agencies worried about the looming 12 December deadline when Australia would reach its $300bn debt limit.

Labor is also refusing to vote for $2.3bn worth of savings it had itself proposed in government to pay for the Gonski reforms, saying the Abbott government was refusing to implement the six-year Gonski funding plan they had been designed to pay for.