The future of Prudential's deal to buy AIG's Asian life insurance arm remained uncertain on Saturday, with the U.S. Treasury saying it has not considered any other deal than the existing contract on the table.

American International Group Inc was bailed out with a $182.3 billion U.S. aid package and has been selling assets to pay back the debt.

It agreed a massive deal earlier this year to sell its Asian life insurance unit, AIA, to Prudential, but in recent days Prudential has entered talks to cut the $35.5 billion price tag in a last-ditch bid to salvage a deal criticized by its shareholders as too expensive, sources previously said.

The UK's biggest insurer wants to cut the price to about $30 billion, a reduction of 15 percent, one source close to the deal, who asked not to be named, previously told Reuters.

AIG feels that $30 billion for AIA is too low and is not in a rush to do a deal, another source familiar with the matter said late on Friday.

AIG believes it has many options for AIA, as it views AIA as a valuable property and does not want to sacrifice value, the source said.

An AIG spokesman was not immediately available for comment.

Options such as an IPO for AIA may not be so attractive in the current volatile equity market. The insurance giant could, however, try to find other partners for a deal.

The U.S. Treasury Department, which bailed out American International Group Inc in 2008, said in a statement released late on Friday that it has not looked at any alternative offer.

Treasury has not considered any alternative other than the existing contract, Treasury spokesman Andrew Williams said. We believe AIA is a valuable business for which there is significant interest.

The clock is ticking for Prudential, which faces a shareholder vote on the deal in little over a week, meaning negotiations are likely to intensify in the coming days.

CEO FUTURES AT STAKE

The future of Prudential Chief Executive Tidjane Thiam hinges on the success of his bid for American International Assurance (AIA) launched by the former Ivory Coast government minister in March after less than a year in the top job.

Discussions regarding the current status of the transaction have taken place between Prudential and AIG and are continuing, Prudential said in a statement on Friday.

These discussions may or may not lead to a change in the terms of the combination, it said.

A collapse of the deal would also be bad news for Robert Benmosche, the head of AIG, which is operating with $132 billion in government support and under pressure to return the money to taxpayers.

The new price negotiations come amid fears the deal, to be funded in part by a record $21 billion rights issue, could fall short of the required 75 percent approval in a June 7 shareholder vote.

The only way that the Pru is going to get a yes vote at the (meeting) is if they manage to get a price cut. In its current form, I am almost certain the vote will fail, one Prudential shareholder told Reuters, requesting anonymity.

A $5 billion price cut would certainly get more people on side. We would certainly revisit our view, the investor said.

Olivetree Securities strategist James Chappell estimated that cutting the price to below $31 billion would give the deal a greater than 50 percent chance of going ahead, compared with about 20 percent now.

Prudential will still need to rebuild relationships with investors and reassure that they can execute on the acquisition, he said.

A large majority of 72 percent said Prudential was paying too much in a Reuters poll of 23 shareholders and analysts on Thursday, while half of the shareholders polled said they expected the company to lose the June 7 ballot.

(Reporting by Megan Davies, Ilaina Jonas, Paritosh Bansal, David Lawder, Jimmy Tsim, Vikram Subhedar; Editing by Eric Walsh)

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