EURO GOVT-Lack of new crisis-tackling steps boosts Bunds

* Bunds rally on lack of new euro zone crisis response

* Greece set for key conference call over next bailout tranche

* Fed meeting eyed for signs of coordinated action on economy

By William James

LONDON, Sept 19 (Reuters) - Bund futures rose on Monday, driven higher by uncertainty as Greece's access to bailout funding hung in the balance and by disappointment at policymakers' latest failure to agree new measures to tackle the euro zone debt crisis.

Finance ministers meeting in Poland broke no new ground over how to ease the crisis and while Greece pledged further austerity measure would be forthcoming, no concrete steps were announced.

"There was some expectation that the EU might announce some sort of new policy to stabilise peripheral markets and ease some of the tensions but they did absolutely nothing," said Nick Stamenkovic, strategist at RIA Capital Markets.

Bund futures FGBLc1 were last at 137.33, up 68 ticks on the day while 10-year bond yields fell 5.6 basis points to 1.808 percent.

EU and IMF inspectors will hold a conference call with Finance Minister Evangelos Venizelos beginning at 1200 GMT to hear how Greece plans to plug this year's budget shortfall.

The talks will be key with Greece set to run out of cash in October unless it can convince officials to release the next 8 billion euro tranche of bailout funding.

"The more you read, the more doubts there are about whether this Greece payment is going to go through -- the ramifications of that are pretty serious," a trader said.

Greece must make coupon payments of around 750 million euros on its existing debt on Tuesday and will hold an auction to refinance expiring bills later in the week.

Analysts said that while the Greek funding situation remained tense, the week's operations were set to be covered without a major hitch.

The European Central Bank will reveal later in the day how much it spent in its latest round of bond buying designed to stem the spread of the crisis to Italy and Spain.

Debt issued by Italy and Spain underperformed Bunds, driving 10-year yield spreads back towards the top of their recent ranges.

Italian 10-year yields have climbed back to 5.615 percent after falling below 5 percent when the ECB expanded its bond-buying programme to include Italian BTPs. The ECB holds 143 bln euros of debt issued by the bloc's weakest states.

Adding to the long list of risks to the region's attempts to overcome its debt problems, Germany's ruling coalition was weakened at federal elections over the weekend.

This raised political risk surrounding the drawn-out process of approving changes to the euro zone's rescue fund -- seen as a vital backstop if Greece is unable to repay its debts.

FED FOCUS

Market participants were looking ahead to this week's U.S. Federal Reserve meeting for a fresh easing of monetary policy that could hint at more coordinated action to address a gloomy economic outlook.

Fixed income markets were pricing in a move to extend the maturity of the Fed's Treasury assets, but if the committee surprises and opts to undertake a third round of full-blown quantitative easing, Bunds were likely to take a hit as risk assets rallied, analysts said.

"If we see QE3 from the Fed, the questions then are 'Will we see the UK (Monetary Policy Committee) approve QE and could we get a rate cut from the ECB?',"said Philip Shaw, economist at Investec in London.

In a coordinated move last week, major central banks said longer-term dollar funding would be made available in a bid to counter growing scarcity of interbank lending to euro zone banks. (Editing by Nigel Stephenson)