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A senior Greek official also said the government expected parliament to vote by the end of June on its medium-term austerity plan, a condition for the new international package as Athens struggles to avoid defaulting on its debt.

A team from the IMF, EU and European Central Bank reached an agreement last Friday, under which Athens would impose more austerity and faster privatization to cut its budget deficit.

But Bob Traa, the IMF's senior representative in Greece, said the European Union needed to do more work before the Fund's board could release more loans.

"I believe there is a summit in Europe, in June, where some hard nuts need to be cracked. They need to make some decisions, and then we will go to our board and disburse in early July," he told a banking conference.

EU officials are struggling to find a solution for Greece's financing needs for the next few years which avoids triggering a default but pushes some of the burden onto the private sector.

"What needs to be decided is how to fill the various parts of the financing. This is not something that we can do as a team," said Traa.

Greece agreed a 110 billion euro rescue with the EU and IMF a year ago. But this assumed Athens could resume borrowing commercially in early 2012, which is now inconceivable as yields on Greek debt are sky high in the secondary market.

"VOLUNTARY" PARTICIPATION

Details of the new deal to supersede the May, 2010 rescue have yet to be hammered out, but it assumes Greece's funding needs will be covered by a mix of new EU and IMF loans, budget deficit cuts including tax increases and state asset sales, and a "voluntary" participation by private creditors.

One possibility is that creditors would agree to buy new Greek bonds when old ones they hold mature, meaning that Athens would not have to produce the cash up front.

The managing director of ratings agency Moody's sovereign risk group said on Tuesday it was hard to see how a private sector rollover of Greek debt would be truly voluntary and it would therefore likely constitute a default.

"It's hard to imagine in the current circumstances that people would voluntarily do this," Bart Oosterveld told reporters in Paris. "Our default definition contemplates that for something to be voluntary it has to be truly voluntary ... More likely than not this would be a credit event in our view."

The IMF's Traa warned that a major restructuring of Greek debt would create untold problems in the euro zone but hinted that the IMF was open to other solutions.

"Stretching out payment terms, for instance in loans from euro area partners and the IMF, is a reasonable thing to think about because we have amortization right at the end of the program. This is a technical issue we can think about," he said.

Greece has already won an extension of the time it has to repay EU loans. The IMF has said it was also open to a similar move but first needed an agreement with Brussels.

Greek sovereign debt totals 340 billion euros or about 150 percent of GDP and Traa said the government needed to move fast on its problems. "Greece is at a critical juncture and has no time to waste, now is not the time to slow down," he said.

It is unclear whether private sector banks would sign up to such a deal, how much they would be prepared to contribute and whether ratings agencies would look on such a move as a default.

Germany's BDB banking association said private creditors should only be involved as a last resort and that that point had not been reached yet.

"It is in everyone's interest that we overcome the debt crisis and that Greece stays in the European monetary union," BDB President Andreas Schmitz said in a statement, but added: "The involvement of private creditors can come only as a last step as part of a solution that is sustainable for all parties. That point has not yet been reached."

OPPOSITION DEMAND

Earlier, a senior Greek official said the government also planned to cut corporate tax -- a demand of the conservative opposition -- and reduce value-added tax from 2012.

However, these measures would not be part of the medium-term economic plan, he told reporters. "Parliament will vote on the medium-term plan by the end of-June. It will be voted on as a single article," he said, asking not to be named.

Dissenters within the ruling PASOK party have demanded that each part of the plan, which includes 6.4 billion euros in new austerity steps this year, be handled in separate votes.

Voting on the plan as a single package would prevent the doubters from rejecting individual measures such as tax increases or sales of state assets.

PASOK lawmakers were debating the plan, said government spokesman George Petalotis. "The medium-term plan ... is just a staircase, a step for us to get back on our feet."

A second official repeated government assurances that it would not seek early elections despite daily mass protests against yet more budget cuts.

The EU has called on all leading Greek parties to forge a consensus on the medium plan, which covers a period beyond the next scheduled elections in 2013.

(Additional reporting by Ingrid Melander, George Georgiopoulos and Renee Maltezou; writing by David Stamp; editing by Patrick Graham)

Most Asian stock markets fell after the S&P .SPX extended its slide to a fourth day overnight, hitting its lowest since mid-March, as a spate of weak U.S. economic data pointed to slowing growth. .N

The euro traded at $1.4609 at 0443 GMT (12:43 a.m. ET), having fallen as low as $1.4555.

The common currency came under pressure on Monday after Jean-Claude Juncker, chairman of the Eurogroup, made his comment about valuation and a spokesman for the German finance ministry said a second aid program for Greece was not certain.

"Those comments (from Juncker) probably weighed on the euro at the margin. But the direction of a weaker dollar is pretty clear this point in time, so I'm expecting a bounce in the euro," said Richard Grace, chief currency strategist at Commonwealth Bank.

The euro has gained more than 4 percent since climbing from its May 23 trough versus the dollar. Despite uncertainty over a fresh rescue package for Greece, it is being supported by persistent U.S. dollar weakness and expectations that the European Central Bank will signal a July interest rate rise at its policy meeting on Thursday.

Investors will be closely following a speech by Federal Reserve Chairman Ben Bernanke at a conference around 1945 GMT (2:45 p.m. ET) on Tuesday for more clues on the central bank's view of the slowdown and its impact, if any, on the Fed's exit from its extremely easy monetary policy.

The Australian dollar, the world's fifth-most traded currency, fell below $1.0700 after the Reserve Bank of Australia held rates steady at 4.75 percent, from $1.0745 before the decision. Markets had been expecting it to repeat a warning that rates would likely have to rise in the next few months in order to put a lid on price pressures, but no such indication was given.

The Nikkei average .N225 was marginally higher at 9,439.13 as short covering of utilities and some bargain-hunting offset selling on fears that U.S. growth may be stalling, analysts said.

"When the Nikkei trades below 9,400 institutional investors buy global cyclical shares as a long-term investment and retail investors tend to buy defensive shares with high dividend yields, such as drugmakers," said Fujio Ando, a senior managing director at Chibagin Asset Management.

MSCI's index of Asia-Pacific stocks .MIAPJ0000PUS outside Japan fell 0.5 percent.

Technical indicators suggest further declines may be on the horizon, analysts at Barclays Capital said in a research note.

"Various topping patterns in equity markets from different regions suggest the risk of an ongoing corrective pullback in equity markets over the summer," they said.

Brent crude oil for July delivery fell 60 cents to $113.88 a barrel, extending Monday's fall when it closed at its lowest in two weeks, on expectations OPEC will raise production targets when it meets this week.

U.S. gasoline prices fell for the fourth week in a row last week as crude prices recoiled, relieving some pressure on consumers and reinforcing the views of some economists that the current economic "soft patch" will be temporary.

U.S. retail sales data due out later in the day may signal whether lower fuel prices enticed shoppers back into the stores.

Gold was almost around $1.50 higher at $1,544.66 per ounce by 0453 GMT (12:53 a.m. ET), after closing at $1,543.05 on Monday. Gold, one of the chief beneficiaries of worries about the security of currencies and other assets, set a record high of $1,575.79 per ounce in early May.

(Reporting by Ian Chua in Sydney and Ayai Tomisawa in Tokyo; Editing by Kim Coghill)

The broad-based index has fallen 4.5 percent since a recent high at the start May and is trading at six-week lows after falling through technical support levels. Investors are eyeing the index's low for April.

"We are precariously close to testing the April low of 1,294.70, which if broken adds a danger factor of the market testing the March low of 1,249.05," said Andre Bakhos, director of market analytics at Lek Securities in New York.

A much weaker-than-expected jobs report on Friday was the latest disappointing economic news to hit sentiment.

S&P 500 futures fell 3.3 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 25 points, and Nasdaq 100 futures dropped 5.5 points.

In what could be a bright spot for investors, Apple Inc (AAPL.O) Chief Executive Steve Jobs, who has been on medical leave for months, takes to the stage in San Francisco Monday and could take the wraps off what investors hope will be the next source of growth for the company. The shares rose 0.5 percent to $345 in premarket trade.

World markets were weak Monday. The pan-European FTSEurofirst 300 .FTEU3 index of top shares fell for a fourth straight session, down 0.5 percent. .EU

The Nikkei average .N225 fell 1.2 percent to an 11-week closing low as speculation that Tokyo Electric Power Co (9501.T) could go through a restructuring fanned bearish sentiment in the wake of soft U.S. data.

Brent crude fell 1.3 percent to $114.39 a barrel on concern about demand ahead of a key OPEC meeting later this week. Signs that high prices are destroying demand in the West are worrying a group of OPEC's core members.

Greek Prime Minister George Papandreou starts a campaign to secure a new international bailout by imposing a long period of austerity on a nation already seething over corruption and economic mismanagement.

Google Inc (GOOG.O) is a "political tool" vilifying the Chinese government, an official Beijing newspaper said, warning that the U.S. Internet search group's statements about hacking attacks traced to China could hurt its business.

Nobel Prize winner Peter Diamond said Sunday he planned to withdraw as a nominee for Federal Reserve governor after his nomination was repeatedly opposed by Republicans.

Goldman Sachs Group Inc (GS.N) could release documents to counter a Senate subcommittee report that claimed the bank misled clients about mortgage-linked securities, the Wall Street Journal reported, citing sources.

(Editing by Jeffrey Benkoe)