Brussels, Sept 1 (Reuters)

Greece will back grants of some 200 million euros ($212 million) in European Union aid to Turkey but is not abandoning its right to veto EU funding for its neighbour, Alternate Foreign Minister Yannos Kranidiotis said on Wednesday.

The move, while couched in terms of "humanitarian duty", appears to be a further sign of a thaw between the rivals, ushered in by Greece's swift an substantial response to the August 17 earthquake which killed at least 14,000 Turks.

Athens is apparently shelving a tough policy that, besides annoying EU partners and giving some an alibi for ducking the problem of Turkey's EU aspirations may pose risks for its aim of bringing the Greek part of Cyprus into the EU.

Since rapprochement with Turkey can be political dynamite in Greece, however, the government is moving with great caution.

Kranidiotis said he visited the European Commission in Brussels on Wednesday not, as some reports indicated to announce the end of Greece's veto on funds for Ankara but to discuss Greece's stand on long-term EU aid for Turkey after the quake.

"We want to help Turkey face the difficulties and the problems created by the tragic events of the earthquake. This we consider as our humanitarian duty", Kranidiotis told Reuters.

His talks with acting European External Relations Commissioner Hans van den Broek involved "the technical ways and means of realising this political will"

He played down reports that Greece was effectively ditching its long-standing opposition to handing over 375 million euros in financial adjustment aid to Turkey, set aside in 1995 to compensate Ankara for the costs of a customs union with the EU.

"We are not lifting any veto. We are giving our consent to aid to Turkey", the minister said. "The veto has its limits, of course. But it is a weapon which if selectively used, carefully, especially by small countries, can be of great help".

But Kranidiotis acknowledged that a new approach to relations with Turkey was taking shape, in the context of new Greek perspectives on foreign policy in the wake of recent changes in the region.

"Greek foreign policy has evolved, has developed. I think the war in Kosovo has played a great role, the new situation in the Middle East. All these developments have contributed so that we have a new look into the priorities of our foreign policy, Kranidiotis said.

"Relations between Greece and Turkey are difficult. There are serious problems, political problems which should be addressed… This does not mean that the climate between Greece and Turkey cannot be improved. And this is what we are trying to do", he said.

"I think the earthquake acted as a kind of catalyst to demonstrate that finally, there is no (automatic) animosity between the Greece people and the Turkish people", he added.

Kranidiotis said a strategy of trying to find common ground with Turkey on "low-key issues" such as environment, culture and trade, had developed very well.

"The climate has been good and we hope that eventually these discussions will have an impact on the big issues", he said, referring to Cyprus and Aegean territorial disputes.