Hungary wants to overcome all legal hurdles with Brussels to start vital loan negotiations with the European Union and the International Monetary Fund as soon as possible, Deputy Prime Minister Tibor Navracsics said on Tuesday.

He spoke as the EU was preparing to freeze half a billion euros in aid to Hungary, for the first time punishing a member state for flouting budget rules.

Hungary, eastern Europe's most indebted nation, is mired in a months-long legal row with Brussels over laws affecting the central bank, the judiciary and data protection authority, which have so far blocked talks on vital aid that the country needs to cut borrowing costs.

"Our goal is to resolve as many ambiguous situations as possible," Navracsics said. "We want to create an atmosphere of trust between Hungary and the three institutions (the IMF, the EU and the European Central Bank) that ensures a relatively quick start to the talks, and possibly a quick conclusion as well."

The government has given mixed signals about its intentions, voicing a willingness to come to terms with its partners but also stressing its resolve to take issues to the EU courts if they contradict Hungary's interests.

"Obviously turning to the European Court is a last resort," Navracsics said. "That would mean we were unable to find a solution. I would be very happy if we did find one."

On the key issue of central bank independence, Navracsics said the government had already done a lot to meet EU and European Central Bank concerns and that remaining problems concerning the number of deputy governors and the potential expansion of the Monetary Council, were not hard core policy issues.

"The ECB looks like it wants more verbal commitment that the government will not curb the central bank's independence," Navracsics said. "We think that goes without saying in the 21st century. I expect we would need such symbolic concessions in this area."

Asked whether the government would change legislation on these issues too if the EU insisted, Navracsics said:

"That goes without saying. We have negotiated non-stop. If possible... if we look at the way the European Commission and the government negotiate, we see that the government has been able to make significant compromises already."

(Reporting by Marton Dunai and Gergely Szakacs BUDAPEST | Tue Mar 13, 2012 9:28pm GMT BUDAPEST, Reuters. Editing by Jeremy Gaunt.)

http://uk.reuters.com/article/2012/03/13/businesspro-us-hungary-government-idUKBRE82C1AV20120313

(Reuters)