By Stephen Brown

BERLIN (Reuters) - Greek Finance Minister Yanis Varoufakis tangled yet again with Berlin on Monday after German television aired a 2013 video purportedly showing him making a rude gesture toward Europe's economic powerhouse.

Varoufakis denied brandishing his middle finger - known in Germany as the "Stinkefinger" - during a lecture in Croatia where he said Greece should have defaulted in 2010 rather than accept a multi-billion euro bailout package.

"The video was faked, without doubt," he told German news magazine Der Spiegel's online version on Monday.

German public broadcaster ARD, which showed the video on Sunday, said it had seen "no sign of manipulation" but would have experts check it.

Varoufakis has regularly traded barbs with Germany, especially with his irascible counterpart Wolfgang Schaeuble, since the leftist Syriza party took power in January pledging to end austerity and renegotiate the bailout terms.

Athens has also urged Germany to pay reparations for the wartime Nazi occupation of Greece, a demand Berlin has rejected.

"My proposal was that Greece should simply announce that it is defaulting ... and stick the finger to Germany and say 'you can now solve this problem by yourself'," Varoufakis says on the video, raising his middle finger.

Confronted with the video, Varoufakis told ARD: "I have never given the finger ever."

Appearing on the same show, Bavaria's state finance minister Markus Soeder said straight out that Varoufakis was lying.

"It is getting more and more difficult to accept Mr Varoufakis as a serious partner in negotiations," he told the online version of business daily Handelsblatt.

A Marxist economist, Varoufakis has surprised many European capitals with his unconventional approach, appearing to question Greece's commitment to honor past pledges in interviews.

He also raised eyebrows by appearing in the glossy French magazine Paris Match, enjoying a meal with his wife on the terrace of their upmarket flat overlooking the Acropolis - a prime location in Athens.

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Varoufakis later said he regretted the photoshoot but not the interview. There was little reaction in Greece, where unemployment has soared above 25 percent and output tumbled during recent years of budget rigor.

Chancellor Angela Merkel's spokesman denied last week any "personal feud" with Athens existed, but Berlin's patience is clearly running out. Schaeuble said last week he could not rule out an accidental Greek exit from the single European currency.

Last week Athens complained to Berlin, saying Schaeuble had insulted Varoufakis at a news conference. The German minister denied the accusation.

(Writing by Crispian Balmer and Stephen Brown; Additional reporting by George Georgiopoulos in Athens, Micheal Nienber in Berlin and Alessandra Galloni in Cernobbio; Editing by Tom Heneghan)