(Adds statement on subsidies, background)
CAIRO, Oct 3 (Reuters) - Egypt's prime minister said on Wednesday that an IMF team would come to Cairo in the last week of October to resume negotiations on a loan sought by Egypt and that his government was still working on the key issue of how to reduce fuel subsidies.
Egypt has been negotiating a $4.8 billion loan from the International Monetary Fund but has indicated it may seek to increase that amount.
Egypt urgently needs financial support to prop up state coffers weakened by economic turmoil since the popular uprising last year that ousted President Hosni Mubarak.
The IMF is demanding Egypt put a programme in place that will narrow a budget deficit that has mushroomed to 11 percent of gross domestic product since the uprising ousted Mubarak in February 2011.
An Egyptian delegation will hold talks with the fund during an annual IMF and World Bank conference in Tokyo on Oct. 9-14 to prepare for the Cairo visit, Prime Minister Hisham Kandil said at his weekly news conference.
The visit had earlier been scheduled to take place before the end of September, but on Monday both the IMF and the government said it had been delayed to give Egypt more time to finalise an economic reform programme.
One of the key components of the programme is a restructuring of petroleum product subsidies that eat up about 25 percent of total government spending.
Kandil told the news conference that a series of measures were needed to ensure that subsidies reached those who deserved them most.
Until now the government has not settled on the final form or time frame for restructuring the subsidies or whether petroleum products would be distributed using coupons or electronic smart cards, he said.
"All these are ideas that are being discussed and will be discussed by the government," Kandil said.
In an earlier interview with Reuters, Petroleum Minister Osama Kamal said the idea of fuel ration coupons had already been dropped and the government had opted for smart cards.
(Reporting by Patrick Werr; Editing by Toby Chopra)
Keywords: EGYPT IMF/