By Kevin Krolicki and Jui Chakravorty

DETROIT/NEW YORK (Reuters) - Chrysler LLC's first-lien lenders have offered to take equity in a restructured automaker allied with Fiat SpA (FIA.MI: Quote, Profile, Research) in exchange for writing off about 35 percent of the $7 billion they are owed, according to people with knowledge of the closed-door talks.

Under the terms of the counter-offer conveyed to the U.S. Treasury on Monday, the lenders would retain about $4.5 billion in debt and take a stake of more than a third of a new Chrysler supported by new U.S. government investment and a ground-breaking deal with Fiat.

That would mark a much richer payout than U.S. officials first offered the banks that helped finance Chrysler's 2007 sale to private equity firm Cerberus Capital Management CBS.UL.

The gap underscores the tension between a diverse group of creditors, including more aggressive funds, and the government officials dictating turnaround terms for Chrysler with just nine days before a deadline for the No. 3 U.S. automaker to complete its restructuring talks.

Rep. Gary Peters, a Michigan Democrat whose district includes Chrysler's headquarters, called the counter-offer "an affront to taxpayers."

"This is not a serious counter-offer," Peters said in a statement. "These debt holders were offered fair market value for the debt, and the banks have responded by asking for a windfall."

The Obama administration's autos task force had proposed that creditors write off $6 billion of what they are owed, a proposal that would have left the group of institutional creditors holding about $1 billion in Chrysler debt. That would represent a write-down of 85 percent of the loan value.

The Chrysler counter-offer including equity would allow the roughly 45 banks and funds that hold Chrysler debt to benefit from investment gains if it succeeds in a restructuring that could see operational control shift to Fiat Chief Executive Sergio Marchionne.