The European Central Bank is weighing up whether to allow the Greek bonds held in national euro zone central banks' investment portfolios to be subjected to the same writedowns private investors are set to take, central bank sources told Reuters.

Euro zone central banks hold around 20 billion euros of Greek bonds in their traditional investment portfolios.

The bonds are separate to the 40 billion euros worth of Greek debt bought by the ECB under the purchase programme it started in May 2010 and is now in the process of ring fencing to protect from writedowns.

Three euro zone central bank sources said that the issue of taking losses was currently under debate at the ECB.

One added that it was fifty-fifty whether the deal would go ahead, adding that the only time limit on a decision was the Greek debt deal with the private sector which is expected to be sealed early next week.

The news pushed benchmark German bund futures to a session low.

If euro zone central banks do take losses on the investment portfolio bonds it would provide an immediate lump sum for Athens and be another contribution from the ECB on top of the 12-15 billion euros of purchase programme profits it has made clear will also be made available.

A bigger contribution from the ECB and the central banks that sit under its wing would help oil the wheels of Greece's drawn-out debt deal.

It would massage down the country's 129 percent debt/GDP figure closer to original 120 percent target by time of Monday's Eurogroup meeting, where euro zone officials hope to seal the 130 billion euro (108 billion pound) rescue package from the EU and IMF needed to prevent Greece going bankrupt.

Swallowing writedowns on at least some of the Greek bonds the ECB and central banks own could also help allay concerns bond holders may have had following news that the ECB has cut a deal to protect its purchase programme from Greek losses.

Economists argue that the move set in stone the idea that the ECB is receiving preferential treatment in the bond market, something that could put off investors from buying Portuguese, Irish, Italian and Spanish bonds - debt the ECB also holds.

(Reporting by George Georgiopoulos and Marc Jones in Frankfurt, editing by Mike Peacock/Jeremy Gaunt)