Europe shares bounce as optimism on Greece wins out

* FTSEurofirst 300 up 0.8 pct after Athens team reshuffle

* Deutsche Bank (Xetra: 514000 - news) down 5 percent

* Volkswagen (Other OTC: VLKAF - news) , HSBC advance

By Atul Prakash and Lionel Laurent

LONDON, April 27 (Reuters) - European shares reversed early losses and posted gains during afternoon trading on Monday, with persistent concerns about Greece's debt situation offset by optimism that a reshuffled Greek negotiating team would help matters.

Greece looks set to run out of cash in the coming weeks, with fruitless debt relief talks between euro zone finance ministers on Friday serving to highlight the gulf between Athens and its creditors.

However, news on Monday that Prime Minister Alexis Tsipras had reshuffled his team handling the talks helped stem early selling, with the pan-European FTSEurofirst 300 index up 0.8 percent at 1505 GMT, and German and Greek equities strongly outperforming.

"Greece has recast its negotiating team for the talks with creditors, which contributes to reassure investors," said Pierre Martin, a trader at Saxo Bank.

Financials were also in focus after Deutsche Bank's biggest strategic overhaul under co-chief executives Anshu Jain and Juergen Fitschen got a thumbs-down from investors, who judged it too little, too late. The bank's shares fell 5 percent.

The German lender plans to cut 200 billion euros ($217 billion) in investment bank assets and exit a 10th of the countries in which it operates as part of a restructuring programme designed to boost earnings and cut risk.

Europe's biggest bank, HSBC, rose 3 percent on a report that it was weighing plans to spin off its British retail bank in a 20 billion pound ($30 billion) deal.

European banking shares, shunned by investors after the lenders accrued a spate of expensive fines and were hit by restrictive new regulations, are attracting interest again as the outlook for lending improves and valuations look to be bottoming out.

Volkswagen was one of Europe's top gainers, rising 4.6 percent after its supervisory board chairman Ferdinand Piech resigned on Saturday (Shenzhen: 002291.SZ - news) following a showdown with Chief Executive Martin Winterkorn.

Cap Gemini rose more than 7 percent after raising its sales outlook for 2015 and announcing plans to buy the U.S.-based IGATE Corp.

Mediaset (Other OTC: MDIEF - news) rose as much as 7 percent in brisk trade, with traders citing a report that French media group Vivendi (Swiss: VIV.SW - news) would be interested in buying Italy's biggest private commercial broadcaster.

Shares (Berlin: DI6.BE - news) in Sweden's Industrivarden rose after its main owners dismissed the chief executive before his planned appointment as chairman, the latest casualty in a corporate spending scandal centred around part-owned SCA. Sandvik (Stockholm: SAND.ST - news) , one of the firm's investments, rose 7.8 percent.

UK house-building stocks Taylor Wimpey (LSE: TW.L - news) and Barratt Developments lost ground, with traders citing plans by the opposition Labour Party to impose rent controls if it won next week's election. (Additional reporting by Alexandre Boksenbaum-Granier; Editing by Alison Williams)