Vilnius  - Lithuania's finance ministry confirmed Thursday that it is in talk with unnamed lenders to secure a loan to cover a budget shortfall in the Baltic country.

Outgoing Prime Minister Gediminas Kirkilas told the Lithuanian parliament about the move, which was confirmed by finance minister Rimantas Sadzius in an interview with the Baltic News Service.

"Mistrust is raging in financial markets, which forces us to be cautious. Therefore, there is no openness either from the state, or from banks, or from other players," the minister said.

Neighbouring Latvia is already negotiating an economic assistance package with the International Monetary Fund (IMF) and the European Union (EU), and is expected to announce details net week.

A finance ministry spokesperson told Deutsche Presse-Agentur dpa that he could not reveal who the talks were being held with or the size of loan being requested. More details would be given next week, the spokesman said.

Income from tax revenues has fallen behind government targets in the largest of the Baltic states, and at the end of October was lagging by some 224 million dollars.

The government of Gediminas Kirkilas is about to be replaced by a new coalition government led by Andrius Kubilius, who made budgetary reform and public spending cuts a key part of an election manifesto that saw him win October's general election.

His role as new prime minister was due to be confirmed by the parliament Thursday.

Kubilius' plans also include the sale of the Lithuanian state's 10 per cent stake in the huge Mazeikiai oil refinery.

Polish oil company PKN Orlen, which already owns 90 per cent of Mazeikiai shares confirmed Thursday that it had earmarked around 290 million dollars to buy total control.

"This is a good opportunity to privatize the shares and thus reduce the state's need for borrowing," said Lithuanian central bank economist Raimondas Kuodis during a Wednesday discussion at the Democratic Policy Institute in Vilnius. (dpa)