* Finance Minister seeks "creative" approach to minimise impact on state finances
* Says state "bad bank" would saddle taxpayers with losses
* Says confident Brussels will allow more time for asset sales (Adds quotes and background)
VIENNA, June 12 Austria is seeking "creative" ways to clean up ailing nationalised lender Hypo Alpe Adria, Finance Minister Maria Fekter said on Wednesday, rejecting the option of a "bad bank" that would hit state finances before elections.
She also said she was confident she could get more time from the European Commission for an orderly wind-down of the bank that Austria took over in 2009 and which eked out a small profit last year.
In a parliamentary debate, Fekter rebuffed Greens party deputy leader Werner Kogler's appeal to set up a state bad bank that could absorb toxic assets from Hypo and pave the way for the selloff of its operating units that Brussels has demanded take place by the end of 2013.
"What Mr Kogler wants means carving all the loss-making parts out of the bank and saddling taxpayers with this. This is maximising losses for taxpayers. It is also not the most creative solution," Fekter said.
With elections due by September, Fekter has resisted mounting pressure to set up a state-owned bad bank for Hypo, which the head of the agency overseeing aid to the banking sector has estimated could boost the ratio of state debt to GDP by up to 5 percentage points.
The bank was pushed to the brink of insolvency by a decade of overly ambitious lending and expansion into the Balkans.
Fekter said she was working instead on options including investment companies, funds and foundations that would not send state debt and deficits soaring.
"There are lots of property and leasing deals here that don't have to land in a bad bank," she said, adding that the state could find partners to help carry out the plan.
"We are thus working on a structural complement with an eye to have the least possible burden for the budget and taxpayers."
She gave no other details, and ministry officials declined to elaborate.
Reuters reported last month that Vienna may adopt Ireland's bad bank model that brings in private investors as majority owners, thus keeping its debts off state books. But the banking sector has shown scant appetite for taking part.
The outspoken Fekter has often taken a lone policy stance, for example in her defence of Austrian banking secrecy, before finally backing down under domestic political or international pressure.
European Union Competition Commissioner Joaquin Almunia said in March that Hypo faced possible closure for failing to adequately restructure.
Fekter said intensive talks were under way with the Commission, which could force Hypo to repay more than 2 billion euros in state aid it has got since Vienna had to nationalise it to avoid a collapse with regional repercussions.
"I am confident that we will get a positive decision on aid from the Commission and that we will also get significantly more time than Almunia had threatened in the original letter from March 14," Fekter told parliament.
Austrian Chancellor Werner Faymann has estimated that winding down Hypo could cost up to 7 billion euros, and has angered the banking sector by suggesting that it absorb the costs.
The bank's former chairman, Johannes Ditz, has said Hypo's overall state aid bill could be capped at 5 billion euros if Vienna and Brussels agree a revised revamp plan.
(Reporting by Michael Shields; Editing by John Stonestreet)