European shares jump on hopes of Greek debt deal

* FTSEurofirst 300 up 1.6 pct, Euro STOXX 50 up 2.7 pct

* United Internet (Xetra: 508903 - news) rises after says it may float division

* DNB (Other OTC: DNBHF - news) beats second quarter earnings forecasts

By Alistair Smout

LONDON, July 10 (Reuters) - European stocks surged on Friday after Greece made substantial concessions in its latest bid to win new funds from creditors and avert bankruptcy.

The pan-European FTSEurofirst 300 was up 1.6 percent at 1,535.94 points by 0757 GMT, with the euro zone blue-chip Euro STOXX 50 rising 2.7 percent.

The VSTOXX, a volatility index for European shares, fell 2.1 points to 28.6, its lowest level so far this month.

Greece has asked for 53.5 billion euros ($59 billion) to help cover its debts until 2018 and has pledged new tax hikes in return. France's economy minister said that he is reasonably confident a deal can be done.

Traders said that the latest reform plan had made investors cautiously optimistic that a deal could be struck by Sunday's deadline, although having seen many similar proposals fall through, many remained wary.

"The market is taking heart from the fact that it looks like the wheels are moving to get something done. But the devil is in the detail," Peregrine & Black senior sales trader, Paul Chesterton, said.

"The German authorities will need to ratify any deal, and the Greek parliament also need to sign up to it, so many hurdles remain."

Top riser on the FTSEurofirst 300 was United Internet AG , up 4.5 percent after the German Internet service provider said on Friday it may float its business offering web-hosting and other online services to corporate customers to fund an acquisition drive.

The insurance sector rose 2.3 percent, led higher by France's AXA (Paris: FR0000120628 - news) , up 4.3 percent.

Barclays (LSE: BARC.L - news) raised its target price for many major names in the sector, including AXA, Standard Life (LSE: SL.L - news) and RSA.

Norway's largest bank DNB rose 4.2 percent after it reported second-quarter earnings ahead of expectations and cut its forecast for loan losses this year.

The FTSEurofirst 300's rise helped it further away from a five-month low hit on Wednesday.

However, it remains down more than 7 percent from a 14-year high hit in April, pressured by uncertainty over the Greek debt crisis and volatility in Chinese markets.

In addition to optimism over a potential Greece deal, global markets also took heart from a continued recovery in China's stock market, which rose strongly for a second day on Friday, buoyed by a barrage of government support measures.

Europe bourses in 2015: http://link.reuters.com/pap87v

Asset performance in 2015: http://link.reuters.com/gap87v

Today's European research round-up (Editing by Louise Ireland)