UPDATE 1-Marfin Popular Bank says unaware of takeover offer

* Daily Mail reports rumours ING eyeing Marfin takeover

* ING declines comment, Marfin says unaware of any proposal

* Marfin Popular shares rally on report

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ATHENS/NICOSIA, July 27 (Reuters) - Marfin Popular (MRBr.AT), Cyprus's second-largest lender, is not aware of any takeover proposal, a spokesman said on Tuesday after the bank's shares rose on rumours that ING (ING.AS) was planning to buy it.

The Daily Mail reported late on Monday that there were rumours Dutch financial group ING would offer to buy Marfin Popular for 2.2 euros a share.

"We are not aware of any proposal," said a spokesman for Marfin Popular Bank in Nicosia, who declined to be named. ING declined to comment.

Marfin Popular shares gained as much as 10 percent in early trading in Athens. The shares were up 7.4 percent at 1.89 euros at 0833 GMT.

Marfin Pop said late on Friday it had passed the European Union stress test, with a Tier 1 ratio of 7.1 percent under its worst scenario. Its capital buffer was estimated at 302 million euros.

Speculation about bank mergers in Greece has proliferated after the government earlier this month urged lenders to seek alliances, and Piraeus Bank (BOPr.AT) offered 701 million euros in cash to buy state stakes in peers ATEbank (AGBr.AT) and Hellenic Postbank (GPSr.AT).

ING is splitting its bank and insurance operations. The group has been shrinking its bank operations, after needing state aid in 2008 at the height of the credit crisis. ($1=.7746 Euro) (Reporting by Michele Kambas in Nicosia and Gilbert Kreijger in Amsterdam; additional reporting and writing by Harry Papachristou; editing by Simon Jessop)