UPDATE 1-Japan has not decided on contribution to IMF -source

TOKYO Feb 23 (Reuters) - The Japanese government has not yet made a decision on contribution to the International Monetary Fund (IMF), a senior government official said on Thursday, denying media reports of a $50 billion grant to help counter Europe's debt crisis.

The IMF is seeking to more than double its firepower by raising an extra $600 billion to help countries deal with the fallout from the debt crisis, but the plan faces resistance from countries such as the United States and Canada.

Europe's debt crisis will dominate talks between Group of 20 policymakers this weekend as the rest of the world looks for pledges that the euro zone will boost its crisis safety net.

But G20 finance ministers and central bankers are not expected to decide specifics when they gather in Mexico City ahead of talks between European leaders on their firewall plans the following week.

"Japan has not decided anything about the amount of possible contribution," the government source told Reuters, when asked about the report from the Asahi Shimbun. "No country has ever made any decision regarding the amount of contribution."

The $50 billion cited in the Asahi report matches the amount expected to be refunded to Japan from a $581 billion crisis lending fund -- the New Arrangements to Borrow (NAB) -- at the IMF.

It was roughly half the $100 billion Japan contributed in bilateral loans to the IMF to help it cope with the fallout of the 2008 Lehman shock.

The refund would be made when full approval of previously agreed increases in quotas -- the contributions that determine IMF voting rights -- comes which would boost the IMF's lending capacity to around $755 billion.

When the IMF quota is raised after national procedures of ratification among the IMF's 187 members, the NAB lending fund would be scaled back in accordance with the quota increase.

There's a discussion internationally that the rollback portion of the NAB can be used as new bilateral lending to the IMF after the quota, Japanese officials said.

But only around 70 of the IMF's 187 members have so far approved the quota increase, they said.