Private holders of Greek bonds represented by the Institute for International Finance (IIF) said on Friday they had halted debt restructuring talks with Athens to reflect on whether the deal should be kept voluntary, the IIF said in a statement.

Under the circumstances, discussions with Greece and the official sector are paused for reflection on the benefits of a voluntary approach, said the statement, emailed to Reuters.

Euro zone leaders and the IIF agreed in late October that euro zone governments would provide Greece with a second bailout package worth up to 130 billion euros, but that banks would voluntarily forgive Greece 50 percent of privately held debts, or 103 billion euros.

The voluntary aspect of the deal was to prevent triggering the payout of insurance that investors bought against a Greek default.

Unfortunately, despite the efforts of Greece's leadership, the proposal put forward... has not produced a constructive consolidated response by all parties, consistent with a voluntary exchange of Greek sovereign debt and the October 26/27 agreement, the statement said.

(Reporting By Jan Strupczewski; editing by Luke Baker)