By Manny Mogato

MANILA. Sep 29 (Reuters) The Philippines is unlikely to meet a September 30 deadline for a fresh initiative to resurrect peace talks with the country's largest Muslim rebel group, a member of the government's negotiating team said today.

Manila will instead ask for more time to consult with political, economic, religious and civic leaders on the rebels' demand for an enlarged Muslim homeland in the south to end nearly 40 years of insurgency.

''We've not totally given up on re-starting the talks,'' said the member of the government's peace panel, who requested anonymity. ''We simply needed to talk to more people and get a consensus on what new initiative would be put across the table.'' Manila has been talking with the Moro Islamic Liberation Front (MILF) for 10 years to try and end a conflict that has killed more than 120,000 people and displaced over one million since the late 1960s.

Negotiations have stalled since June because of differences over the size and wealth of a proposed homeland for about 3 million Muslims in the south.

After the latest round of informal talks on Sept 6-7 broke down, Manila asked Kuala Lumpur, which has been hosting negotiations, to allow the Philippines to package a new initiative by tomorrow.

No details about the initiative have been released and analysts suspect President Gloria Macapagal Arroyo is reluctant to agree a deal which could upset politicians loyal to her in the south and risk their re-election next year.

''Everything may have to wait until after the elections in May because the President would not risk losing the support of Muslim and Christian politicians in the south who were opposing any deal with the rebels,'' said Earl Parreno, analyst at the Institute of Political and Electoral Reform.

Mohaqher Iqbal, the rebels' chief negotiator, said the MILF would not be surprised if Manila asked for an extension to the September 30 deadline.

''It only demonstrates the government's lack of political will to end the conflict,'' he told Reuters from his hideout in the south.

Iqbal said the MILF was flexible on the issue of territory and was willing to give up claims to wider areas already occupied by Christian settlers, but insisted that no conditions should be attached to a deal.

REUTERS PR HT1518