(Adds source on count of replies)

LONDON/VIENNA, March 11 (Reuters) - An attempt by the Austrian province of Carinthia to avert the threat of insolvency has failed as too few creditors accepted its offer to buy back a failed bank’s bonds at a discount, a person with knowledge of the total said on Friday.

Carinthia guaranteed local bank Hypo Alpe Adria’s bonds before the lender collapsed and the so-called bad bank Heta Asset Resolution was formed to wind it down.

The province wants to repurchase the bonds at a discount to their face value of 10.8 billion euros ($12.1 billion) to avoid having to honour those guarantees, which it says it cannot afford.

Its offer, announced in January, expired at 1600 GMT.

A two-thirds majority is required for the buyback to take effect, but an umbrella group of creditors that says it controls roughly half the bonds has rejected the offer because it wants to be repaid in full.

A spokeswoman confirmed shortly after the Friday deadline that the umbrella group’s members had turned down the offer of 75 percent of the senior bonds’ nominal value, plus a late sweetener added by Austria’s finance minister.

“The offer has been declined,” a person with knowledge of the matter said of the tally of replies, which is not expected to be announced until Monday.

Neither Carinthia nor the Austrian government, which has agreed to lend the province the money to pay the creditors, would be drawn on whether the offer had failed.

“We are prepared for all possibilities, whatever the outcome,” Carinthia’s finance chief Gaby Schaunig said in a statement on Friday.

Failure would be a disappointment for Austrian Finance Minister Hans Joerg Schelling, who tried to break the deadlock last week by offering creditors the prospect of additional returns through a specially issued government bond.

Creditors faced the choice of certain payment of three-quarters of the senior bonds’ nominal value within days or a long legal battle in the hope of being repaid in full.

The discounted offer was based on an estimate of what would be recovered from selling Heta’s assets, plus a contribution from Carinthia of 1.2 billion euros.

If the offer fails, creditors will be left with what is recovered from the assets and are likely to turn to Carinthia for the rest, though the province says it would face insolvency.

Carinthia has said it went as far as it could, but the holdout creditors argue it could go further, either by taking on more debt or by selling more assets.

An Austrian province has never gone bankrupt and just what might be recovered in insolvency proceedings is unclear.

“Those who have rejected economic sanity are those who have lost,” Finance Minister Schelling said in a statement.