A commission auditing Ecuador's foreign debt says it has found what it describes as "illegality" in the obligations. The finding may prompt President Rafael Correa to suspend Ecuador's bond payments.

The audit commission says in a new report that Ecuador's debt has grown to the benefit of financial sectors and transnational companies and gone against the country's interests.

It is reportedly recommending that the government suspend payments on three bonds amounting to nearly $4 billion worth of debt.

Last week, President Rafael Correa withheld a $30 million interest payment on a 2012 bond, saying he will use a month-long grace period to consider the legitimacy of the external debt.

Standard and Poor's has also downgraded Ecuador's debt rating by three notches (from B- to CCC-) over concerns the country will default and find ways to avoid repaying its foreign debt.

It is not clear whether Ecuador will seek to restructure its obligations.