Greece will decide within weeks on whether to activate a euro zone aid package, Prime Minister George Papandreou said, as a poll showed austerity measures had begun hitting Athenians' pocket books.

Athens will start official talks with European officials and the IMF on Monday to clarify details on the deal which, at an estimated 45 billion euros ($63 billion) in the first year, would be the largest such bailout ever attempted if Greece asks for it.

We will have to make a decision about whether we activate this mechanism in the next few weeks, Papandreou said in the transcript of an interview sent to Reuters by the prime minister's office.

Investors are increasingly certain Athens will tap the aid after a bid by euro zone leaders to flesh out its details last week failed to rein in a spike in borrowing costs that are complicating Greece's attempts to cut its budget deficit.

But ambiguity over the aid's logistics has fueled persistent market doubt over Greece's short-term financing.

Unanswered questions include whether parliamentary approval required in some euro zone states could cause delays or if Germany, facing a May 9 election in which most voters oppose helping Greece, could drag its heels on approval.

In Madrid, Greek Finance Minister George Papaconstantinou said it would take one week, two weeks maximum for euro zone countries to trigger the mechanism if Greece were to ask for it.

We are quite comfortable that once the framework is in place, meaning the program together with the financing elements, we will be able to move very fast, he said, following a meeting of euro zone finance ministers.

However, he left questions about a road show Greek officials plan in the United States next week unanswered.

On Friday, Japan's Jiji news agency cited the head of Greece's debt agency as saying Athens would start a road show to gauge appetite for a dollar-denominated bond after April 20, but Papaconstantinou said no plans had been finalized.

There have been no decisions on either dates for a roadshow or, even more, dates or an amount for an eventual dollar issue, he said. This will be announced but there are no decisions on this whatsoever. I want to make this absolutely clear.

BELT-TIGHTENING, BORROWING

Last month, the government cut the pay of around 600,000 public workers, froze pensions and raised taxes to reduce its shortfall in public finances this year by almost a third to 8.7 percent of gross domestic product.

The European Commission has said Athens should need no more austerity measures if it taps the aid, but Greece's central bank governor said it should accelerate deficit cuts by closing dozens of loss-making and spendthrift state bodies.

This is how we will manage to positively please the markets by ourselves, by reducing the deficit by 5 percent (of GDP), instead of the 4 percent we have pledged for in the Stability and Growth Plan, Bank of Greece Governor George Provopoulos told weekly Realnews.

A poll of 1,000 people in Athens showed the measures hitting home, with half of those surveyed saying their incomes no longer covered their needs. Seven out of 10 believed the aid deal, if tapped, would lead to a further deterioration of their living standards, the survey in daily To Vima showed.

Papandreou said the aid package was not a bailout and would give Greece room to solve its problems, which also include worries that the economy will shrink more than the 2 percent forecast by the central bank hitting budget revenues.

It gives us the room to maneuver to make the necessary changes to make our economy a viable one, he said.

But persistent doubts over the potential aid deal have hit markets. The yield on Greek 10-year bonds closed at 7.4 percent on Friday, three percentage points over pre-crisis levels. That pushed the yield difference between 10-year Greek debt and benchmark German bonds up 15 basis points to 426, close to a euro era record of 463 last week.

Aside from questions over Greece's long-term solvency, investors are also honing in on the roughly 12.6 billion euros the Mediterranean state must raise by the end of May to refinance debt, make bond interest payments, and finance its deficit.

Its next test will be a sale of 1.5 billion euros in short-term debt on April 20, and then a bigger obstacle: an 8.5 billion euro bond coming due on May 19.

Despite investor concern, Papandreou said there should be no problems raising the funds.

We will not default, he said. The problem is the cost of borrowing, and how long we can sustain that. I don't see a problem even in May, but that doesn't mean that we have closed the option of using this mechanism.

(Writing by Mike Winfrey; Editing by Toby Chopra)

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