* Only deadline is next Eurogroup meeting – govt official

* Talks with EU/IMF “very tough and difficult”, official
says

* Unions call 24-hour strike against more austerity

* Frustration reaches breaking point in euro zone

By Renee Maltezou and Lefteris Papadimas

ATHENS, Feb 6 (Reuters) – Greece let yet another
deadline slip on Monday for responding to painful terms for a
new EU/IMF bailout as patience in Brussels wore thin over
drawn-out negotiations among its feuding political leaders.

Failure to strike a deal to secure the 130 billion euro
($170 billion) rescue risks pushing Athens into a chaotic debt
default which could threaten its future in the euro zone.

Panos Beglitis, spokesman of the PASOK socialist party, said
on Sunday that leaders of the three parties backing technocrat
Prime Minister Lucas Papademos’ government had to give their
responses in principle by noon (1000 GMT).

However, a government official denied that the parties had
been given an ultimatum to respond on Monday.

Asked whether the parties had to respond in time for a Euro
Working Group meeting of finance ministry officials in Brussels,
the Greek official said: “No, there is no deadline.”

He said the entire Greek side had to agree terms of the
rescue, which would be the second for Athens since 2010, with
international lenders before the next meeting of the Eurogroup
of euro zone finance ministers.

“The only deadline is to have a staff agreement for the
second bailout and the agreement of the political leaders before
Eurogroup,” said the official, who requested anonymity.

No date has yet been set for the Eurogroup meeting, although
it is expected this week.

In Brussels, frustrated EU officials said Greece was already
in “overtime” after failing to clinch an agreement at the
weekend on a package incuding wage and pension reductions, job
cuts and tougher tax enforcement measures.

“It will be very bad if there is no white smoke from Athens
today,” said one euro zone government source.

“We have already missed deadlines. In order to prepare the
fresh tranche of money and reschedule debt in the first half of
March, a whole series of technical steps must be taken. We need
a decision now to put the mechanism of rescheduling in place.”

Beglitis said the deadline had merely slipped to Tuesday due
to the changing timetable of euro zone meetings.

Leaders of PASOK, the conservative New Democracy and the
far-right LAOS party – who may face an angry electorate in
parliamentary polls as soon as April – still have to agree on
unresolved problems.

These include labour market reform and shoring up domestic
banks. Greece needs the bailout money by March to meet big debt
repayments but tempers are rising in the European Union over
what it sees as Greek dithering on implementing reforms.

BANK HOPES

Papademos said after five hours of talks on Sunday that
party chiefs had agreed measures including wage cuts and other
reforms as part of spending cuts worth 1.5 percent of gross
domestic product.

Hopes rose on Monday that they had also made progress on
recapitalising domestic banks, which are up to their necks in
Greek government bonds now worth a fraction of their face value.

Greek bank stocks were up 8.8 percent at midday
on hopes that lenders would be recapitalised without being
nationalised after a debt swap under the latest bailout deal,
which will radically cut the value of their bond holdings.

“Banks are concerned with the way they will be
recapitalised, so that they remain independent … It seems it
will be done through a combination of instruments, which will
reduce the risk of their nationalisation,” said Natasha
Roumantzi, head of analysis at Piraeus Securities.

The euro fell broadly on investor concern that the
parties had yet to sign off on the terms of a new bailout with a
deadline imminent, keeping alive the risk of a messy default
which could rock the currency bloc. The single currency slid by
0.6 percent to stand at $1.3070.

Talks on the bailout have dragged on for weeks.

WORN DOWN

Greeks have been worn down by a deep recession, now in its
fifth year, and wave after wave of austerity measures imposed
under the first bailout.

Alarmed by the prospect of yet more budget cuts, Greece’s
two main trade unions said they would call a 24-hour strike for
Tuesday in protest against policies they say have only driven
the economy into a downward spiral.

“Despite our sacrifices and despite admitting that the
policy mix is wrong, they still ask for more austerity,” Ilias
Iliopoulos, secretary general of public sector union ADEDY, told
Reuters.

ADEDY and its private sector sister union GSEE, which will
join Tuesday’s strike, represent about 2 million workers or
roughly half the country’s workforce.

Leftist and communist-affiliated groups will rally at around
1600 GMT on Monday to march to parliament.

With Greece facing 14.5 billion euros of debt repayments in
March, a bill it cannot meet without further bailout funds, the
stakes could not be higher.

Officials have emerged increasingly despondent after each
round of talks, complaining that the troika of European Central
Bank, European Commission and International Monetary Fund was
refusing to yield on demands to cut the minimum wage, axe
holiday bonuses and fire public sector workers.

New Democracy and LAOS in particular have staunchly opposed
further wage and spending cuts, arguing they risk precipitating
an even deeper recession and imposing more pain on Greeks.

The slow progress has angered Greece’s European partners.
Euro zone officials say finance ministers told Greece on
Saturday it could not go ahead with an agreed deal to
restructure privately held debt until it guaranteed it would
implement reforms.

“There is a great sense of frustration that they are
dragging their feet,” one euro zone official said.