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By Alexandra Ulmer and Jorge Otaola
BUENOS AIRES, June 19 (Reuters) - Argentina hasn't prepared a team to go to New York to negotiate with holdout bondholders, Cabinet chief Jorge Capitanich said on Thursday, casting doubt over whether it will seek a deal to stave off a debt default.
His remark appeared to contradict the government's lawyer, Carmine Boccuzzi of Cleary Gottlieb Steen & Hamilton, who said in federal court on Wednesday that Argentina would send officials to New York next week to seek negotiations with holdouts for the first time.
"There is no delegation prepared for a possible trip to the United States," Capitanich said in his morning briefing, although he also did not rule out negotiations.
A government source said later that Capitanich was referring to a lack of detail about who would travel and when, but that he wasn't saying talks wouldn't take place.
Argentina on Wednesday also said it couldn't afford to make its next bond payment, due June 30, if it had to pay the holdouts as well as the owners of its restructured bonds. Uncertainty about the government's strategy pushed Argentine stocks down about 3.5 percent in Thursday trading.
The 2nd U.S. Circuit Court of Appeals ruled on Wednesday that Argentina can't continue to pay creditors who agreed to restructure their bonds after its 2001-02 default on $100 billion in debt unless it also pays $1.33 billion to the holdouts demanding full payment.
President Cristina Fernandez's leftist government has until now refused to pay the holdouts and says the court rulings make it impossible to meet the next payment to holders of restructured debt.
Capitanich also referred to Economy Minister Axel Kicillof's remarks this week that Argentina was exploring ways to pay holders of its restructured bonds outside of U.S. law, an issue that was discussed yesterday in a hearing before U.S. District Judge Thomas Griesa in Manhattan.
"Therefore this (lifting of the stay) obviously changes the conditions from the point of view of paying, that's what generates the alternative conditions of paying under national law," Capitanich said.
Griesa said yesterday that adopting another payment mechanism of the kind proposed by the finance minister would violate the orders of his court.
Negotiations between the government and hedge funds leading the group of holdouts could resolve the crisis but the two sides appear to be far apart and Argentina is running out of time.
While the debt payment is due on June 30, the government has a grace period of 30 days before falling into default.
Fernandez has said she is open to negotiations while also accusing the holdouts of "extortion" and implying that her government might try to skirt the U.S. court rulings by bringing the debt under Argentine law.
The tough talk may be a bid to bolster Argentina's power at the negotiation table but it risks further angering Griesa, who has ruled consistently in favor of the holdouts and criticized Fernandez's public comments.
The holdout creditors are led by NML Capital Ltd., a division of billionaire Paul Singer's Elliott Management Corp., and Aurelius Capital Management, chaired by Mark Brodsky.
"Argentina's lawyer has informed the court that unidentified government officials will come to New York on an unidentified day next week to discuss settlement after years of rebuffing settlement overtures," Brodsky said in a statement on Wednesday. "I have learned not to rely on any assurance Argentina's counsel provide to our courts. I expect a charade, but I hope to be proven wrong."
Spokesmen for NML and Aurelius on Thursday declined further comment about whether prospective talks were in the works. (Reporting by Buenos Aires newsroom; Additional reporting by Nate Raymond and Alison Frankel in New York; Writing by Alexandra Ulmer; Editing by Kieran Murray and John Pickering)