* Toronto to defer projects to cover funding gap

* Ottawa again refuses C$400 mln funding request

* Finance minister says timeframe too long (Updates with results of Toronto city councilors' vote)

By Frank Pingue and John McCrank

TORONTO, June 26 (Reuters) - Toronto reluctantly agreed on Friday to pay about C$400 million more than it had planned to buy streetcars from Bombardier Inc (BBDb.TO: Quote, Profile, Research) after the Canadian government refused to help fund the C$1.2 billion ($1.04 billion) project.

The deal with Bombardier would have expired if Toronto had not completed arrangements to fund the fleet of 204 streetcars by Saturday, and the city would have had to issue another call for bids.

Councilors in Canada's biggest city agreed in a raucous eleventh-hour meeting on Friday to defer other transit projects to beyond 2018 in order to cover the funding gap.

Toronto will now pay nearly C$800 million toward the streetcar project, while the province of Ontario has pledged C$416 million.

The city had initially expected about one-third of the money to come from Ottawa, but federal politicians said the project did not meet the requirements of its infrastructure stimulus fund.