South Africa's Eskom said on Monday that the 90 billion rand ($4.96 billion) and counting in unpaid debts it is owed by towns and cities risks wiping out its government bailout, as it argued for tariff hikes.

The government has insisted a three-year debt-relief package worth more than 250 billion rand promised by South Africa's National Treasury last year is the power utility's last.

Eskom's chief financial officer made the comments at the first day of public hearings into the company's application for electricity tariff hikes over the next three years.

Eskom has asked the energy regulator to approve tariff increases of roughly 36% from April next year, 12% in 2026 and 9% in 2027, prompting criticism from political parties and civil society groups worried about the impact on economic growth and communities struggling to make ends meet.

"For Eskom to be financially sustainable … this tariff decision is a key ingredient but not the only ingredient," said Calib Cassim, adding that debt owed by municipalities and large cities was growing at a monthly rate of 1-1.5 billion rand.

"The debt relief that we've got from government and National Treasury will be neutralised if this continues to increase," he said.

Eskom is known for the perilous state of its finances and for subjecting South African businesses and households to regular power blackouts for more than a decade.

But this year there has been a dramatic turnaround in electricity supply from its coal-fired power stations, and the country has gone without scheduled power cuts for eight months.

Eskom submits electricity tariff applications to energy regulator Nersa, which consults the public before deciding whether to approve an increase. It rarely grants Eskom the full increase sought.

The Democratic Alliance (DA), which governs the City of Cape Town and is a coalition partner of the African National Congress at a national level, staged a small protest outside Monday's public hearing.

"It is unfair, it is unaffordable and it is outrageous," Cape Town Mayor Geordin Hill-Lewis told the protest as DA supporters waved placards reading "Nersa don't let Eskom bleed us dry" and "Eskom is taking food off our table".

($1 = 18.1341 rand)

(Reporting by Wendell Roelf; Editing by Alexander Winning and Alexander Smith)