* Euro slips, market awaits details on Greek aid
* Investors worry over other euro zone states' problems
* Yen gains broadly on risk aversion
(Adds comment, updates throughout)
By Naomi Tajitsu
LONDON, April 27 (Reuters) - The euro fell against the dollar on Tuesday as investors sought clarity about talks on financial aid for Greece, while worries over credit risk in other countries led investors to dump the single currency.
Heightened risk aversion hit the euro while boosting the dollar and the yen. European shares fell as markets awaited details of financial aid Athens is seeking from the European Union and the International Monetary Fund to help pay its debts.
German Chancellor Angela Merkel's party said on Tuesday it would bring up the subject of haircuts on Greek debt with the European Central Bank and the IMF on Wednesday. [ID:nBAT005346]
Berlin has demanded Athens take painful austerity measures in return for aid. [ID:nLDE63P0LU]
The spread between Greek and German government bond yields swelled to 691 basis points on Tuesday, its widest in 12 years as investors demanded higher premiums to hold Greek debt. Athens needs to secure funding before a May 19 debt rollover deadline.
Uncertainty about the terms under which Greece would receive support would keep the euro under selling pressure, analysts said.
The cost of insuring Greek debt hit a record high as did that of Portugal, reflecting wider euro zone credit risk which some analysts said could potentially create cracks in the euro system.
"Indications from euro zone members are that aid will be provided, but there remain uncertainties about the terms," said Kasper Kirkegaard, currency strategist at Danske in Copenhagen.
"The trouble of not having a set-up to deal with these problems while other euro zone countries may be facing issues is a concern to the market."
By 1014 GMT, the euro had slipped around 0.6 percent on the day to a session low of $1.3307 according to Reuters data. The euro hit a one-year low around $1.32 on Friday.
The euro was dragged lower by a 1.4 percent fall in European shares <.FTEU3> as concerns about Greece heightened risk aversion, to the benefit of the safe-haven dollar. Against a currency basket <.DXY> the dollar rose 0.2 percent to 81.625.
The single European currency fell nearly 1 percent to 124.65 yen <EURJPY=R>. General risk aversion often benefits the low-yielding yen.
The Australian and Canadian dollars retreated from 19-month highs set against the yen on Monday, but some in the market said the yen's gains may be limited, given expected launches of toshin retail investment funds later in the week.
The dollar <JPY=> slipped 0.2 percent to 93.70 yen.
Greece formally asked for aid on Friday and talks between the government, the European Union and International Monetary Fund were under way in Athens.
Germany's Merkel has said she supports aid for Greece because the euro's future is at stake, but has consistently taken a tough line on offering potential help. The aid talks come just before a May 9 regional election in Germany.
Given the widespread German public opposition to a Greek bailout, analysts say there is a possibility Merkel may lose the vote, depriving her coalition government of its majority in the lower house of parliament.
"The market is wondering whether political ramifications could delay the money or raise a question mark over whether Greece will be able to finance itself before the deadline," said Daragh Maher, senior currency strategist at Credit Agricole.
(Editing by Nigel Stephenson)