International banks and insurers will meet on Wednesday to thrash out a plan for the private sector to contribute to Greece's bailout effort as fears grow that the proposal will be derailed.

The Institute of International Finance (IIF) lobby group said it will chair the meeting of private-sector creditors.

It needs to resolve how a deal can get past credit rating agencies without it being termed a default, and how accountants will deal with it.

A lot of work remains to be done and Wednesday's meeting will not be decisive, several sources said.

It's a process. The new French finance minister said today it will take weeks, over the summer. It's complex. It can't be settled overnight, a French private sector source involved in the talks said.

He said there was unlikely to be a single one-size-fits-all solution but rather several options, given the number of different bondholders and stakeholders involved.

The issue is so complex that we need more time, a German banking industry source added.

French banks, major holders of Greek sovereign debt, have proposed voluntarily renewing Greek bonds when they fall due. Bondholders would reinvest at least 70 percent of the proceeds from bonds maturing between now and the end of 2014 in new 30-year Greek debt.

The Financial Times said a new proposal, sweetened to be more attractive to Greece, would be presented at Wednesday's meeting, lowering the interest rate and raising the proportion of debt targeted for rollover in the French plan.

The interest rate would come down to as little as 5.76 percent rather than the range of 5.5-8.0 percent originally suggested, the report said.

Politicians and bankers had expressed confidence last week that the French proposal would not trigger a default, but rating agency Standard & Poor's on Monday said it would involve losses to debt holders, most likely earning Greece a selective default rating.

The S&P statement was taken by EU policymakers as a message to rework the plan not to ditch it, an EU source said.

The French plan will not be abandoned for obvious political reasons, because member states want to have something to give to their national parliaments, the source said.

The IIF said on Friday that banks supported proposals to aid Greece and were considering a small number of options. Creditors are now trying to hammer out details.

A meeting involving some banks was held in Paris on Tuesday in an informal discussion to resolve issues, people familiar with the matter said.

There is also concern that the private sector may fall short of the target of raising 30 billion euros ($42.6 billion) from the plan if Germany's proposed 2 billion euro private-sector contribution is a gauge.

That made it essential to involve pension funds, hedge funds and insurers as well as banks, the French source said.

There are 82.6 billion euros of Greek government bonds maturing before the end of 2014, according to Reuters data.

The European Central Bank and other euro area central banks hold an estimated 25 billion euros of that debt, leaving about 58 billion in private hands. But not all creditors will participate.

France's new Finance Minister Francois Baroin said he would go to Berlin on Thursday to discuss the second Greek rescue package with his German counterpart Wolfgang Schaeuble.

The target date is at the end of the summer (for an agreement), during the month of September, Baroin said.

Getting clarity on the accounting treatment of France's plan remains a key issue to getting momentum, sources said.

Moving too far from market prices could lead to an impairment on a wide portfolio, but too small a move would make it too costly for Greece.

The IIF, which represents insurers and other financial firms as well as banks including BNP Paribas, Deutsche Bank, HSBC and Societe Generale, is playing an informal role co-ordinating international banks to reach consensus about private-sector involvement in a bailout of debt-ridden Greece.

Wednesday's meeting will be chaired by Charles Dallara, IIF managing director. It is one of a series of meetings the IIF is co-ordinating, running in tandem with technical discussions held since an IIF meeting in Rome a week ago.

(Reporting by Alex Chambers, IFR Markets, in London; Paul Taylor in Paris; Additional reporting by Steve Slater in London, Julien Toyer in Brussels, Philipp Halstrick in Frankfurt and Jean-Baptiste Vey in Paris; Editing by Hans-Juergen Peters and David Hulmes)