The International Monetary Fund could withhold the next slice of aid to Greece due next month, the head of euro zone finance ministers said on Thursday, spooking markets with the possibility of default.

European stocks fell and safe haven bond futures rose after Jean-Claude Juncker said the IMF expected the European Union to step in if it were unable to release the June aid tranche, but that would be impossible.

Juncker's spokesman later clarified that if European and IMF inspectors were convinced by new Greek austerity measures, there would be no problem with the June aid tranche.

Greece's finance minister said this week that if the next 12 billion euro ($17 billion) payment, of which 3.3 billion euros is from the IMF, was not forthcoming, the country would be unable to meet its obligations and would default.

Juncker said on Thursday: If the Europeans have to acknowledge that the disbursement from the IMF on June 29 cannot be operationally implemented, then the expectation of the IMF is that the Europeans would step in for the IMF and take upon themselves the IMF's portion of the financing.

That won't work because in certain parliaments -- Germany, Finland and the Netherlands and others, too -- there is no preparedness to do so, he told a conference.

Some analysts said Juncker's comments were an act of brinkmanship to press Greek political leaders, who meet on Friday, to form a consensus behind tougher austerity measures, revenue increases and privatizations to get the country's bailout program back on track.

But they also appeared to reflect a tug-of-war between the global lender and major EU creditors, led by Germany, over a further multibillion-euro aid package for Athens.

We are looking very carefully at what the IMF does ... and if they don't say a new tranche in loans should go the Greeks, then we won't either, Dutch prime minister Mark Rutte said in a video placed on website youtube.com.

An IMF spokeswoman in Washington confirmed the Fund could not continue to lend to Greece until it had financing assurances from EU partners for Athens' borrowing needs for the next 12 months.

We never lend when we don't have an assurance there will be no (financing) gap. That is how we maintain the safety of our members' money, spokeswoman Caroline Atkinson told a briefing. The IMF was also seeking assurances about Greece's fiscal and growth policies, she said.

The EU funding is not assured because Greece has fallen behind targets for strengthening its finances, euro zone official sources told Reuters.

German government bond futures rose on Juncker's remarks.

That's massively negative for Greece, one trader said. It takes (the crisis) to a new level.

FIRST PUBLIC DISPUTE

The first public dispute between the IMF and the EU on euro zone bailouts burst into the open on Monday when Greek Finance Minister George Papaconstantinou said the Fund was threatening to withhold its share until the EU guaranteed that it would cover any shortfall in Greece's 2012 funding needs.

Under its May 2010 EU/IMF bailout program, Athens was supposed to return to capital markets next year, raising 24 billion euros toward its funding needs.

But as the crisis has escalated and Greece has missed its deficit reduction targets due to a revenue shortfall, any prospect of tapping the markets next year has evaporated, raising pressure for the EU to agree a second bailout package.

An IMF mission currently in Greece is also looking at how sustainable Greece's debts are. The outcome of that analysis will be factored into financing assurances needed for 2012.

Antonio Borges, director of the IMF's European Department, said the issue of additional financing for Greece will take place only at the end of the overall review.

A decision will be made when they conclude their work, he told reporters on the sidelines of a conference in Paris.

Euro zone leaders have accepted the principle of further loans to Greece provided it steps up austerity measures, revenue collection and privatizations, but public opposition to more aid is growing in north European creditor countries.

The EU is applying strong pressure on Greek leaders to unite behind the key targets, as Irish and Portuguese politicians have done, making bipartisan support a condition for further aid.

That has heaped pressure on Greek Prime Minister George Papandreou, whose main opponents have refused to support the government's latest austerity measures.

Papandreou invited opposition leaders to fresh talks on Friday to try to build a cross-party consensus.

It is a meeting in search for consensus, even if it is practically almost impossible. I don't think anyone expects that the parties' stance will change now, said Costas Panagopoulos, head of ALCO pollsters.

GERMANY BACKS OFF

The IMF's chief economist said there was still a chance Greece could avoid restructuring its 327 billion euro debt -- equal to 150 percent of its economic output.

The notion that restructuring would be a magic bullet is clearly not right, the IMF's Olivier Blanchard told Reuters Insider in Brazil. [ID:nSPG003352] Restructuring would also come with the risk of contagion.

A key focus this week has been on speeding up a planned sell-off of Greek state assets. The Netherlands is leading a drive for international supervision of the privatization program, with the proceeds used as collateral for loans.

Germany, meanwhile, appeared to back away from the idea of a voluntary extension of Greece's bond maturities, bowing to warnings from the European Central Bank and credit ratings agencies that any such move would be highly risky.

German Finance Minister Wolfgang Schaeuble discussed options for such a soft restructuring with senior euro zone policymakers at secret talks in Luxembourg earlier this month, participants said.

But Schaeuble told Thursday's business daily Handelsblatt that tinkering with maturities would be a leap in the dark.

A debt restructuring scenario bears high risks. It could result in an immediate maturing of all loans, with the corresponding consequences for Greek solvency, he said.

Juncker, who convened the Luxembourg meeting, has also said ministers are working on a soft restructuring of Greek debt, while other policymakers talked of a possible reprofiling.

But the ECB voiced vehement opposition to any attempt to persuade private bondholders to accept longer maturities, threatening to reject Greek bonds as collateral in refinancing operations in that case.

All three ratings agencies said adjusting debt maturities would be considered a default-like credit event, triggering a chain reaction of consequences for Greece's credit rating, Greek commercial banks and companies, and potentially other euro zone sovereigns.

(Additional reporting by John O'Donnell and Jan Strupczewski in Brussels, Lesley Wroughton in Washington, Stuart Grudgings in Rio de Janeiro and Christiaan Hetzner in Berlin; writing by Paul Taylor; editing by Mike Peacock/Ruth Pitchford)