The European Commission on Wednesday denied a report that the European Union, the IMF and the U.S. Treasury were drawing up a liquidity plan for Spain including a credit line of up to 250 billion euros ($335 billion).

Amadeu Altafaj, a spokesman for the EU executive, said the report in the newspaper El Economista was very bizarre and added: I can firmly deny it.

The report, citing sources that it said were close to the issuing entity, said the decision had been discussed at a special IMF board directors meeting and was aimed at avoiding a rescue plan similar to that offered to debt-laden Greece.

A Spanish government spokesman said on Tuesday that talks between the Spanish prime minister and International Monetary Fund chief Dominique Strauss-Kahn set for Friday were unconnected with media reports that Madrid may seek a Greek-style bailout.

Ministers from the 16 countries that use the euro finalized arrangements earlier this month for a special-purpose vehicle to raise up to 440 billion euros ($543 billion) to lend to euro zone countries that run into Greek-style payments problems.

The newspaper report was published one day before leaders from the wider, 27-country European Union meet to discuss ways to strengthen cooperation on economic policy.

Spain has continued to sell its debt on financial markets, with the yields investors charge it up around 1 percentage point in the past month but still a fraction of those which drove Greece to seek aid from the EU and IMF.

It sold 12-month bills on Tuesday at an average yield of 2.303 percent, compared to 1.59 percent in the same auction in May, while the 18-month bill gave 2.837 percent, up from 1.951 percent.

(Reporting by Dale Hudson in Brussels and Elizabeth O'Leary in Madrid; editing by Patrick Graham)

United nations International Monetary Fund