UPDATE 3-Greek PM makes fresh bid for political consensus

* Greek political leaders to meet Friday

* EU has told Greece it needs consensus to get extra aid

* IMF chief economist says Greece needs 10 year of reforms

* Workers at state firms to strike on June 15

* About 5,000 Greeks rally outside parliament

(Adds opposition comment, protest rally)

By Renee Maltezou and Ingrid Melander

ATHENS, May 26 (Reuters) - Greek Prime Minister George Papandreou has invited political party leaders to meet on Friday in a fresh bid to reach consensus on steps to exit a debt crisis that the IMF warned would likely take a decade to overcome.

EU policymakers have warned Greece must have broad political backing for debt-cutting measures to get the extra cash it needs to plug funding shortfalls, demanding the kind of consensus achieved in Ireland and Portugal.

"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," Costas Panagopoulos, head of ALCO pollsters, said on Thursday.

Opposition parties have so far rejected the latest policies aimed at pulling Greecout of a severe debt crisis, saying the belt-tightening agreed in return for a 110 billion euro bailout last year stifles the economy.

Papandreou asked the country's president, Karolos Papoulias, to call in all party leaders, after individual meetings earlier this week failed to reach consensus.

"The prime minister has seen the leaders one by one, this goes one step further," Panagopoulos said. "This has a dramatic tone as these meetings are very rare in Greece's history."

EU and IMF inspectors are examining new Greek measures before granting the next 12 billion euro tranche of the bailout. Without it, Greece cannot cover pressing funding needs of 13.4 billion euros and will go bust.

"The president's office told us that the prime minister has asked for this meeting and that the finance minister and the foreign minister will also be present," a spokesman for the Left Coalition party, which was attending the meeting, told Reuters.

A spokesman for main opposition conservative New Democracy said its leader, Antonis Samaras, would attend the meeting, but in a speech late on Wednesday Samaras reiterated that he would not consent to the government's policies.

"We fully adopt the country's fiscal consolidation targets. But we can't support the way these targets were decided. We consent to the target, but not to the way," Samaras said. "I'm warning them: Don't blackmail New Democracy"

The communist KKE party, which often boycotts such events, and far-right LAOS party said their leaders would also attend.

NO MAGIC BULLET

Athens kick-started a stalled privatisation programme on Monday and promised tougher austerity measures and tax hikes to meet EU/IMF conditions for the release of a 12 billion euro loan tranche in June, vital to keep Greece from defaulting.

Samaras, whose party has voted against the EU/IMF bailout, also rejected earlier this week a call for consensus on austerity. Analysts said Papandreou should water down tax policies to get New Democracy on board.

Other opposition leaders have also refused to lend support to measures required by the EU and the IMF. The IMF's chief economist Olivier Blanchard warned on Thursday that Greece would likely need a decade of adjustment.

"During this 10 years I'd be surprised if we knew for sure if it was going to work," Blanchard told Reuters, adding that a restructuring of Greece's debt was not inevitable and would not be a "magic bullet" for the European country's problems.

There is still a "genuine" chance that Greece could avoid a restructuring, he said. "The notion that restructuring would be some kind of magic bullet is clearly not right," he said, adding that there was a risk of contagion.

The Kathimerini daily reported earlier on Thursday, without naming sources, that Papandreou was considering reshuffling his cabinet to include officials suggested by the opposition if it backs his austerity policies.

The government has denied reports that it was mulling a referendum on extra austerity measures. But the centre-left Ta Nea and Ethnos newspapers said on Thursday this was still one of the options considered by the government.

Workers at state firms slated for privatisation plan a 24-hour strike on June 15 to oppose their partial or full sale to investors, labour union officials said.

More than 15,000 Greeks rallied in Athens on Wednesday chanting "Thieves! Thieves!", fired up by Spanish demonstrators urging them to join protests against austerity.

A rainstorm dampened spirits and a call for a repeat protest on Thursday drew about 5,000 people outside parliament, holding umbrellas and chanting "Get the bailout out of here".

(Additional reporting by Harry Papachristou and Lefteris Papadimas; editing by Mike Peacock, Ron Askew)