* Euro Libor steady, Euribor higher as ECB holds rates
* ECB details new lending rules
* BoE holds rates ahead of election

By Kirsten Donovan

 LONDON, April 8 (Reuters) - Euro interbank lending rates were steady on Thursday as the European Central Bank held interest rates at record lows and gave some details on how new lending rules would work.

 Benchmark sterling rates were also unchanged as the Bank of England kept interest rates on hold at a record low of 0.5 percent ahead of next month's general election.

 The ECB kept its main refinancing rate at 1 percent and confirmed the economic recovery in the euro area continued in the first months of the year.

 The ECB's statement reinforces our belief that the bank will keep interest rates down at 1.00 percent through 2010 before starting to raise them gradually in the first quarter of 2011, said Howard Archer, chief UK and European economist at IHS Global Insight.

 He added that he expected the ECB to continue to tread very lightly in coming months when it came to withdrawing emergency liquidity measures, something the central bank gave no further details of.

 The Greek crisis is clearly complicating the ECB's plans, and will likely continue to do so, Archer said. With Greece's fiscal problems continuing to rattle financial markets' confidence in the euro, central bank President Jean-Claude Trichet confirmed that current collateral rules - which allow for triple-B rated assets to be used at the ECB's financing operations -- would be extended beyond year-end.

 There was a risk that Greek banks would not be able to seek funding at the ECB if the country lost its last remaining single-A credit rating and collateral rules were tightened next year as previously planned.

 Graduated valuation haircuts would be applied to assets rated triple-B as of January 1, the ECB said. Three-month euro Libor rates EUR3MFSR= were unchanged at 0.58063 percent, but equivalent maturity Euribor rates continued to nudge higher, fixing at 0.64 percent after banks took far fewer six-month funds than expected.

 BANK OF ENGLAND ON HOLD

 Three-month sterling Libor rates GBP3MFSR= fixed at 0.64844 percent. The Bank of England made no changes to its monetary policy, as expected with a general election looming next month. It held rates at 0.5 percent and kept its 200 billion pound asset purchase programme on hold.

 With the next government facing the task of tackling a budget deficit of more than 11 percent of GDP, Tullett Prebon's head of G7 market economics Lena Komileva says monetary stimulus measures may have to stay in place for a while.

 The effects (of significant public and financial balance sheet restructuring over the next parliament) on consumer and business confidence and deleveraging in the real economy provide sufficient reason for the BoE to keep its gigantic monetary stimulus in place for longer.

 Markets are not pricing in a BoE rate hike until December this year, BNP Paribas strategist Matteo Regesta said.

 Meanwhile, dollar Libor rates USD3MFSR= edged off 6-1/2 month highs, fixing at 0.29400 percent.

 (Editing by Susan Fenton)