"The public debt cannot continue in this way," he said. Details of the plan had not been revealed to anyone, he added.
Lebanon has one of the largest public debt-to-GDP ratio in the world at around 150 percent and has suffered from years of low economic growth.
Asked about the report, Khalil told Reuters the plan was "part of a reform project" for the public finances, starting with measures set out at a Paris donors' conference last year where Lebanon vowed to bring down its deficit.
"It is a voluntary financial correction plan being prepared in the ministry to avoid anything worse happening," he said. No steps had yet been taken and the aim was to have the plan ready for when a new government is formed, he said.
He told Reuters Lebanon was committed to its Eurobond issuances and those that hold them, and that it would not violate any of their terms.
He said "ideas for the management of the debt and its structure are still under study". He did not refer to debt restructuring.
PATIENCE RUNNING OUT
More than eight months since an election, political leaders have still not been able to agree a new government that could set about reforms to boost confidence.
The International Monetary Fund urged Lebanon in June to carry out "an immediate and substantial fiscal adjustment" to improve debt sustainability.
Fitch and Moodys both last month revised the outlook on Lebanon to negative from stable.
Lebanon's dollar-denominated debt tumbled in early trading.
Some issues - such as the 2020 and the 2025 bond dropped more than 2 cents in the dollar. The yields in the 2020 bond spiked to as much as 13.3 percent.
Khalil, a top figure in the Amal Movement led by Parliament Speaker Nabih Berri, has recently become more vocal in his warnings about the economy. Last month, he said Lebanon was in an economic crisis that had started to turn into a financial one which he hoped would not become a monetary one.
Khalil has held the post of finance minister since 2014 and is expected to retain the position in the new government. A deal on forming the new cabinet to be led by Saad al-Hariri appeared close last month but the last obstacle was not resolved.
Anthony Simond, Investment Manager in Emerging Market Debt at Aberdeen Standard Investments, said the finance ministry, like the central bank last year, appeared to be trying to put pressure on politicians to agree the new government.
"It does feel that the different actors who have kept this show on the road - the central bank and to some extent the ministry of finance - probably their patience is coming to an end, and they realise the external environment isn't very strong," he said.
Lebanon would not need to restructure debt in the next 12 months, he said. "The central bank has sufficient reserves to pay for the upcoming maturities. But in the long-term their debt is unsustainable," he said.
Goldman Sachs, in a Jan. 4 analysis on Lebanon, said it maintained its view that its financial system likely has enough foreign exchange liquidity to finance its deficits under current circumstances for the next couple of years.
It said investors were increasingly turning their attention to the question of debt recovery value in what it described as the still unlikely event of a restructuring of Lebanon's sovereign debt.
(Additional reporting by Karin Strohecker in London; Writing by Tom Perry; Editing by Toby Chopra and Jon Boyle) ((firstname.lastname@example.org; Reuters Messaging: email@example.com))