* Finland's likely next leader says will back Portugal aid
* Says Finland must have clear stance on Portugal by mid-May
* Turnaround in Portuguese polls ahead of election
By Terhi Kinnunen
HELSINKI, April 21 (Reuters) - Finland's finance minister, set to lead the next government, said on Thursday he expected Helsinki to play its part in a financial rescue for Portugal in mid-May despite a Eurosceptical party's big election gains.
Finance Minister Jyrki Katainen sought to reassure euro zone partners and financial markets after a surge in support for the True Finns party, likely to be in the new coalition, caused jitters because of its opposition to paying for another bailout.
"The new, incoming government must have a clear stance on the Portugal matter, as well as on the temporary and permanent mechanisms," Katainen told reporters. His conservative National Coalition party won the most votes in Sunday's general election.
"Before May 16, Finland has to have a stance," he said. Asked whether he still supported giving financial aid to Portugal, he said: "Yes."
A Reuters poll of Finnish political scientists and market analysts found they all expect the True Finns to join the next government. A big majority expect Helsinki will ultimately back the Portuguese bailout nevertheless.
The European Commission's top economic official, Olli Rehn, who is also Finnish, said Finland needed to agree on a stance on assistance to Portugal by a May 16 euro zone finance ministers' meeting to avoid pushing Lisbon towards a potential default.
"Democracy and election reulsts have to be respected," Rehn told the daily Helsingin Sanomat in an interview. "But in parallel with that, the euro group must be able to make such decisions that prevent Portugal from drifting into insolvency."
PORTUGUESE POLLS TURN
Officials from the Commission, the European Central Bank and the International Monetary Fund are in Lisbon working out conditions for an economic assistance programme with the caretaker Portuguese government.
Portugal needs an EU decision in May because it faces a major debt redemption in mid-June, days after a June 5 general election which the latest opinion poll suggested could end in a dead-heat requiring difficult coalition negotiations.
Rehn indirectly dismissed the idea, raised by True Finns leader Timo Soini and the second-placed Social Democratic Party, that there could be an alternative rescue package involving burden-sharing by private sector banks and investors.
"Support for Portugal requires the existing mechanism which is able to go directly to the markets," he was quoted as saying. "Using it requires unanimity."
In Portugal, a poll showed a dramatic turnaround in public opinion since campaigning started for an early general election, forced when the minority Socialist government lost a vote in parliament last month on additional austerity measures.
Caretaker Prime Minister Jose Socrates' Socialist Party overtook the main opposition Social Democrats by a narrow margin for the first time in the survey released on Thursday.
With six weeks until polling day, the Socialists had 36.1 percent of voting intentions, 11.6 percentage points higher than in the previous poll by Marktest pollsters last month, while the Social Democrats fell around 12 points to 35.3 percent.
Markets have been roiled this week by speculation that Greece, the first country to receive an EU/IMF bailout last May, may have to restructure its 325 billion euro debt, which is equivalent to about a year and a half of economic output.
Almost 85 percent of participants in a Reuters poll taken this week said Greece will have to restructure its debt, despite firm denials from Athens.
Greek credit default swap (CDS) prices, a sort of insurance against insolvency, showed a 70 percent probability of default within five years, according to Reuters calculations from Markit data.
The Greek government, which hopes to tap expatriates later this year by issuing so called "diaspora bonds", asked a public prosecutor on Wednesday to investigate an email it said came from a major investment bank that fuelled rumours by suggesting a restructuring was imminent.
"Such rumours are obviously ridiculous," the finance ministry said. Greek bank shares recovered by 1.5 percent on Thursday after falling 4.58 percent on Wednesday.
Ireland, the other euro zone country to have received a bailout last year, said on Thursday it was unlikely to sell off state assets this year after an official report recommended that up to 5 billion euros in state property be sold.
The government-funded report recommended on Wednesday the sale of public stakes in national carrier Aer Lingus and parts of energy utilities Electricity Supply Board and Bord Gais as part of the bailout agreement.
But Minister for Public Expenditure Brendan Howlin told state broadcaster RTE: "If you ask if anything will be sold this year, it probably is unlikely."
The Irish government suffered a setback late on Wednesday when holders of subordinated bonds in Allied Irish Banks launched a legal challenge to its plans to slash the bonds' value by about 80 percent.
The appeal against a High Court order giving the right to impose changes to the terms of 2.6 billion euros of AIB subordinated bonds will be heard on May 9. (Additional reporting by John Acher in Helsinki, Andrei Khalip in Lisbon, Kirsten Donovan in London and Conor Humphries in Dublin; writing by Paul Taylor, editing by Mike Peacock)