* Greece accuse Schaeuble of being condescending
* German minister says complaint is "nonsense"
* Greek frustrated as tries to renegotiate bailout (Adds Schaeuble denial, further Greek, ECB comment)
By Angeliki Koutantou and Renee Maltezou
ATHENS, March 12 (Reuters) - Athens has accused German Finance Minister Wolfgang Schaeuble of insulting his Greek counterpart, further eroding a diplomatic relationship already badly strained by Berlin's tough stance on Greece's debt woes.
Schaeuble, who has become a lightning rod for Greek frustrations about Germany, dismissed the complaint as "nonsense".
Greece said it was angered by Schaeuble's tone at a news conference earlier this week after an EU meeting in Brussels where Greek Finance Minister Yanis Varoufakis had pushed efforts to renegotiate his country's huge bailout programme.
"It was not about a particular quote from Schaeuble, but his condescending, pejorative manner in general," a Greek diplomat in Berlin told Reuters, declining to be named.
Speaking in Athens, Greek Foreign Ministry spokesman Constantinos Koutras said an official complaint was made on Tuesday. "As a minister of a country that is our friend and our ally, he (Schaeuble) cannot personally insult a colleague," he said.
Greek media had quoted Schaeuble as calling Varoufakis "foolishly naive" in his communications. Foreign media did not report the same quote, and Koutras agreed that the minister had been mistranslated, but said his general tone was offensive.
Schaeuble dismissed the notion. "No, I haven't insulted my Greek counterpart, that is nonsense," he told Reuters in Berlin.
The latest spat follows days of tensions between the two countries, with Prime Minister Alexis Tsipras reviving the barbed issue of World War Two reparations and his defence minister threatening to let illegal immigrants head to Germany.
The attacks on Germany reveal frustration in the new Greek government over its difficulty persuading EU partners to relax the conditions of its 240 billion euro ($250 billion) bailout, which it says has caused mass unemployment and poverty.
Since being appointed finance minister in January, Varoufakis has unsettled the often staid European Union with an array of outspoken interviews. Speaking to Greek television on Wednesday, he said he had "great respect" for Schaeuble, but signalled that there were strains:
"Mr. Schaeuble has told me I have lost the trust of the German government. I have told him that I never had it. I have the trust of the Greek people."
In the same interview, he accused the European Central Bank of "asphyxiating" the Greek government by refusing to let Athens raise more money via short-dated T-bill auctions.
The comment earnt him a rebuke from Jens Weidmann -- the head of Germany's Bundesbank and an ECB policymaker.
"It's not because of the ECB that the Greek government has no access to markets," Weidmann told reporters in Frankfurt, adding: "A lot of trust has been lost."
International creditors have frozen the disbursement of any more bailout funds to Greece pending a review of the new government's reform agenda. Economists have warned that without a cash injection, the country could go bust in the coming weeks.
Greek public opinion has largely rallied behind the new administration in its standoff with Europe, seeing Germany as the main culprit for insisting on continued austerity.
On Thursday, a newspaper close to the ruling Syriza party, Avgi (The Dawn), printed a cartoon of Schaeuble saying: "Greeks, you are accused of wanting to live! This desire of yours is punished by death!" ($1 = 0.9439 euros) (Additional reporting by Michael Nienaber in Berlin, Maria Sheahan and Paul Carrel in Frankfurt and George Georgiopoulos in Athens; Writing by Crispian Balmer; Editing by Kevin Liffey and Andrew Heavens)