By George Georgiopoulos
ATHENS (Reuters) - Greek Prime Minister George Papandreou began talks with opposition leaders on Friday in a fresh bid for consensus on the harsh policies needed to tackle the country's debt crisis.
EU policymakers have warned Athens it must have broad political backing for debt-cutting measures if they are to provide extra cash to plug a funding gap next year.
Papandreou's attempts so far have failed, with opposition parties rejecting his latest austerity package on the grounds that the belt-tightening agreed in return for a 110 billion euro bailout is choking the life out of the economy.
The leader of the conservative opposition, Antonis Samaras, who voted against the bailout deal struck last year, has said he will not consent to the government's policies which are killing the economy's ability to grow out of the debt mess.
Also participating in the meeting are the leaders of the communist KKE party, which often boycotts such events, the far-right LAOS party and the Coalition of the Left.
Jean-Claude Juncker, head of the grouping of euro zone finance ministers, alarmed investors on Thursday by saying the International Monetary Fund may withhold its next slice of aid to Greece due next month and that the European Union would not be able to fill the gap.
EU and IMF inspectors are examining new Greek measures before granting the next 12 billion euro tranche of the bailout. Without it, Greece will be unable to cover pressing funding needs of 13.4 billion euros and will go bust.
Athens kick-started a stalled privatization program on Monday and promised tougher austerity measures and tax hikes to meet EU/IMF conditions for the release of the next tranche of the bailout loan, but failed to win opposition support.
The risk that the global lender may bow out from paying its share of the money next month is intensifying the scramble for a solution with the European Central Bank firmly resisting ideas of a soft restructuring -- extending Greek bond maturities.
Analysts say Papandreou, who has a comfortable majority in parliament but is sliding in opinion polls, may have to water down tax policies to get the conservatives on board.
Failure to get consent could lead to snap elections if Papandreou sees no way out of the crisis, or at least a cabinet reshuffle.
An early election would likely lead to a hung parliament in Greece and is something Papandreou will seek to avoid if he possibly can, analysts say. Polls also show Greeks are against early elections.
"The prime minister does not intend to threaten with early elections or a referendum, his intention is to convince the political opposition on the need for consensus," daily Ta Nea said.
(Editing by Mike Peacock)