* Central banks ready to combat Greek market storm
* ECB hints at rate cut, Britain to flood system with cash
* Greek leftist says bailout deal will be dead by Monday
By Eva Kuehnen and Sven Egenter
FRANKFURT/LONDON, June 15 (Reuters) - Central banks from Tokyo to London checked their ammunition on Friday in preparation for any turmoil from Greece's election, with the European Central Bank hinting at an interest rate cut and Britain set to open its coffers.
Tensions were high about how to manage the euro zone's debt crisis - epitomized by Greece's bankruptcy and need for international aid - and a rare fight broke out between Germany and France, normally the glue that keeps the bloc together.
German Chancellor Angela Merkel criticised France's economic performance, effectively taking a swipe at Socialist President Francois Hollande who has called for more emphasis on economic growth and less on budget austerity.
The feeling of crisis was real. "We must do everything possible to prevent the euro zone from falling apart," Dutch Prime Minister Mark Rutte said on television.
ECB President Mario Draghi, one of many policymakers gearing up for trouble after Sunday's vote in Greece, said his bank was ready to step in and fund any viable euro zone bank that gets in trouble.
He painted a picture of a deteriorating euro zone economy with no inflation danger - conditions for monetary easing.
"There are serious downside risks here," Draghi told the annual ECB Watchers conference in Frankfurt, two days before the vote that could set Athens on a path out of the euro zone and stoke turmoil in financial markets.
"This risk has to do mostly with the heightened uncertainty."
Japan's top financial diplomat Takehiko Nakao warned that authorities in Tokyo would respond to unwelcome currency moves as appropriate, a clear threat of intervention if investors seeking safety push the yen too high.
It was an echo of strong pledges from the Swiss National Bank on Thursday that it would do what it takes to protect the franc from soaring.
The Bank of England followed up on Thursday's joint announcement with the government of a 100 billion pound ($155 billion) offer of loans to banks by saying it will start next week with a charge of just 0.75 percent.
In the United States, Treasury Under Secretary for International Affairs Lael Brainard offered assurance that Washington has a"tool kit" and stood ready to preserve market confidence.
"Everyone is well prepared, too, in the wake of the elections on Greece, to work together to make sure there is a path forward that is sustainable for Greece and bolsters confidence more broadly," she said.
Officials from the G20 nations, whose leaders are meeting in Mexico next week, say numerous central banks are preparing to take steps to stabilise financial markets - if needed - by providing liquidity and prevent any credit squeeze.
European Council President Herman Van Rompuy convened a conference call on Friday afternoon with the leaders of Germany, France, Italy and Britain, officially to discuss preparations for the G20 summit, expected to be dominated by the euro zone debt crisis.
Depending on the depth of any turmoil, an emergency meeting of ministers from the Group of Seven developed nations could be held on Monday or Tuesday during the summit in Los Cabos, Mexico, sources said.
The focal point for all is Sunday's repeat general election in Greece, a knife-edge race that could be won by parties vowing to tear up the harsh economic terms that the European Union and International Monetary Fund imposed as conditions of a bailout for the near-bankrupt state.
Such an outcome could drive Greece into default and possibly out of the euro zone, a prospect that could undermine faith in the currency bloc and add to pressure on the finances of bigger economies such as Italy and Spain.
Madrid's borrowing costs rose above 7 percent on Thursday, a level that is widely considered unsustainable. They fell slightly on Friday and European shares gained on expectations of global central bank response. The euro was lower, however.
"At best, we are going to have a situation that is extremely serious on Monday," Swedish Finance Minister Anders Borg told journalists. "In all likelihood, whatever the outcome, we are going to have a government which is going to find it hard to live up to the agreements they (the Greeks) have signed up to."
In a sign of growing strain between Europe's central powers, Merkel hit out at France in response to Hollande's proposals for joint euro zone bonds and a joint bank deposit guarantee scheme.
"Europe must discuss the growing differences in economic strength between France and Germany," Merkel said.
Responding to Hollande's call for more euro zone solidarity, she said Germany had wanted to give the European Court of Justice the power to reject national budgets that breach EU rules but others had objected. She meant France.
Draghi said the ECB was ready to provide money to solvent banks if they needed it, a clear plan to avoid the kind of credit crunch that occurred during the Lehman Brother crisis in 2008.
"The ECB has the crucial role of providing liquidity to sound bank counterparties in return for adequate collateral. This is what we have done throughout the crisis, faithful to our mandate of maintaining price stability over the medium term - and this is what we will continue to do," he said.
Draghi also said that no euro zone country faces an inflation risk, which is the bank's main concern. That gelled with comments from ECB policymakers a day earlier that the central bank might be open to cutting interest rates.
Britain did not wait for the Greek vote to announce action. Bank of England Governor Mervyn King said on Thursday the country would launch a scheme to provide cheap long-term funding to banks to encourage them to lend to businesses and consumers.
The central bank would also activate an emergency liquidity supply, King said.
King said the euro zone's problems were causing a crisis of confidence in Britain that was leading to a self-reinforcing weaker picture of growth.
"The black cloud has dampened animal spirits so that businesses and households are battening down the hatches to prepare for the storms ahead," he said.
On Friday, the bank said it will hold a first emergency liquidity operation for banks next week with at least 5 billion pounds on offer. Loans would be at a minimum of the Bank Rate, 0.5 percent, plus an additional 25 basis points.
STAND-OFF IN ATHENS
In Athens, the election was seen as too close to call. Alexis Tsipras, leader of the main anti-bailout leftist party SYRIZA, said on Thursday the deal with Greece's international lenders, which has helped push the economy into a depression, would not last beyond the weekend.
"The memorandum of bankruptcy will belong to the past on Monday," Tsipras, who has rapidly emerged from fringe politics to challenge the mainstream for power, told his last campaign rally in Athens.
European leaders, however, have warned that Greece will get no help if it reneges. Officials have also hinted that Athens might be granted more time to achieve its fiscal targets if a new government sticks to the core reforms in the programme.
French President Francois Hollande warned Greek voters about seeking what Tsipras has promised - a future in the euro while ditching the 130-billion-euro ($160 billion) bailout deal sealed earlier this year and its demands for punishing austerity policies.
Hollande said on Greek TV that he wanted the country to stay in the euro, rather than reviving its drachma currency.
"But I have to warn them, because I am a friend of Greece, that if the impression is given that Greece wants to distance itself from its commitments and abandon all prospect of recovery, there will be countries in the euro zone which will prefer to finish with the presence of Greece in the euro zone."
SYRIZA is running neck-and-neck with the mainstream conservatives for Sunday's parliamentary vote, a re-run of an election last month that produced a stalemate in which neither the pro- nor anti-bailout camps was able to form a coalition.