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* Refinance 41 pct of country's debt via ECB
* Negotiate 15 pct discount on bailout interest
* Government insists no renegotiation needed
LISBON, Dec 15 (Reuters) - Portugal needs to renegotiate its bailout package or risk social problems spinning out of control soon, a U.N. economist dealing with southern Europe told a local newspaper.
The Expresso weekly on Saturday cited Artur Baptista da Silva, coordinator of a group set up by the United Nations Development Programme (UNDP) to monitor debt-ridden southern Europe, as saying Portugal's bailout programme was yielding "very bad results" and some of its terms had to be changed.
The government and the lenders insist no change of terms is needed and that the programme is "well on track" towards reducing the public deficit. They rule out any need for debt renegotiation to avoid parallels with Greece's crisis, which has already caused a debt writedown.
But Baptista da Silva said Portugal, which has slid into its worst recession since the 1970s after applying tough tax hikes and spending cuts dictated by last year's bailout, doesn't have much time.
"If it's not negotiated now, then in six months' time, we'd have to do it on our knees. All the projections that we've done for the economy, debt, unemployment leads us to believe that Portugal will be in serious difficulties in terms of social control in half a year," he warned.
He said as many as 2 million Portuguese out of 10.6 million were living below the poverty line, surviving on less than 7 euros a day. Unemployment is at record highs of over 16 percent and social strife has grown in the past few months.
The proposed renegotiation would save Portugal 10 billion euros ($13.1 billion), according to the economist.
His group has contacted the Portuguese government and its lenders from the European Commission, European Central Bank and International Monetary Fund, but there has so far been "no political will on behalf of the government" to negotiate.
"As for the IMF, European Commission and ECB, none of them has told us they are closed to negotiations," he said.
The group proposed that a portion of Portugal's debt corresponding to the country's share of EU structural funds since 1986, worth some 121 billion euros or 41 percent of all sovereign debt, be refinanced by the ECB for 10 years at a low rate of 0.25 percent a year.
The U.N. economists argue that this part of the debt was not contracted due to any fiscal irresponsibility on the part of Portugal and Europe should refinance it.
The group also wants Portugal's lenders to give it a 15 percent discount on interest rates charged on the 78 billion euro bailout as well as reduce Portuguese losses from foreign exchange fluctuations affecting the IMF's part of the bailout.
$1 = 0.7628 euros Reporting by Andrei Khalip; Editing by Mark Heinrich