UPDATE 1-EU's Barroso denies Portugal aid talks

Fri Nov 26, 2010 6:19am EST

(Adds other Barroso quote)

PARIS Nov 26 (Reuters) - European Commission President Jose Manuel Barroso flatly denied on Friday that a financial aid plan was in the works for Portugal.

"I can tell you that it's absolutely false, completely false," said the head of the European Union's executive body, adding that an aid plan for the country had neither been requested nor suggested.

The Financial Times Deutschland quoted unidentified sources as saying some euro zone states wanted Portugal to seek aid in order to avoid Spain, the fifth largest EU economy, from having to follow suit [ID:nLDE6AP08Y].

Lisbon, which is preparing to pass an austere 2011 budget later on Friday that aims to deliver tough spending cuts to ward off a deeper debt crisis, issued an emphatic denial in similar words to those used by Barroso, who is himself Portuguese.

Barroso, speaking in Paris at the Organisation for Economic Cooperation and Development (OECD), was responding to a question from a reporter on whether Portugal needed aid on the heels of Ireland.

He was due to meet French President Nicolas Sarkozy later on Friday and said he had spoken in recent days to the leaders of Germany, the EU Council, Eurogroup, International Monetary Fund and the prime ministers of Portugal and Spain.

(Reporting by John Irish; Writing by Brian Love, editing by Mike Peacock, John Stonestreet)

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