Ireland's main opposition party wants to renegotiate the country's EU/IMF bailout to make holders of senior bank debt not covered by a government guarantee share the cost of bailing out the sector.

The center-right Fine Gael party, likely to lead a coalition government after an election early in 2011, said European Union fears that imposing losses on holders of some senior bank bonds would aggravate the euro zone's debt crisis were overblown.

You have the obscene situation now where the poorest of the poor in Ireland, through their taxes and welfare cuts, are being asked to guarantee the speculation of investors in hedge funds, Fine Gael finance spokesman Michael Noonan told national broadcaster RTE on Wednesday.

Ireland has no moral or legal obligation to cover this debt. That is why it is a bad deal. That is one of the principle reasons we are going to vote against it and that is why it has to be renegotiated. It is not a legal bind, it is a policy bind, and we have to break out of it.

Ireland has agreed to ringfence senior bank debt under an 85 billion euros ($113 billion) EU/IMF bailout.

Prime Minister Brian Cowen will put the rescue package to a parliamentary vote at around 1330 GMT on Wednesday. It was expected to pass despite the opposition of Fine Gael and the center-left Labour party.

Parliament will also vote on legislation to allow the government to impose losses on holders of subordinated bank debt, a more risky asset class.

While the government has guaranteed large swathes of bank debt, Noonan said about 15 billion euros of senior bank debt was not covered and this should be renegotiated to reduce the burden on taxpayers.

The ECB and the European authorities are very fearful that any attempt to renegotiate senior debt in Ireland will lead to a knock-on effect across Europe and that was a valid fear up to about two months ago. But what is happening now is that the speculators have gone into the secondary market.

Most of the Irish banking bonds are being held by hedge funds in the U.S., in London and in Luxembourg and by private investors across Europe. They are speculating, said Noonan, who may be finance minister following a general election, possibly in March.

It is time to sit down with these people who understand these things and have a transparent, negotiated burden sharing.

(Reporting by Carmel Crimmins; Editing by Dan Lalor)

($1 = 0.7506 euro)