* Cuts Q4 programme to 60 bln eur v 89 bln initially planned
* Benefits from favourable budget, market developments
* Does not see 30-yr linker, foreign bond issued in Q4
By Christina Amann and Paul Carrel
BERLIN, Sept 23 (Reuters) - Germany on Thursday scaled back its debt issuance plans for the fourth quarter, reaping the benefits of a robust economic recovery that has eased budget pressures and cut Berlin's borrowing costs.
Detailing what was a widely expected issuance cut, the German Finance Agency said it aimed to issue 60 billion euros of debt instruments in the fourth quarter -- down from 89 billion planned in its original 2010 programme published last December.
"This is a result of favourable developments in the federal budget together with the current situation in the financial markets," the agency said in a statement.
The news - which markets had anticipated while lacking clear indications of the scale of the cut -- boosted already buoyant German government bond prices.
The euro zone debt crisis has proved a clear help to Germany on debt markets, where risk aversion among investors has meant lower yields -- and lower issuance costs -- on German paper while yields have risen on peripheral euro zone instruments.
Highlighting the flight to quality, the premium investors demand to hold 10-year Irish government bonds rather than benchmark German Bunds rose on Thursday to a euro lifetime high. [ID:nLDE68M0M4]
Stronger-than-expected economic growth has also helped ease the strain on Germany's public finances.
The economy grew by 2.2 percent on the quarter in the April-June period -- the fastest quarterly expansion since reunification -- and the government can expect billions more in revenues this year as a result.
The Finance Agency said it planned to issue 2-3 billion euros in inflation-linked bonds in the fourth quarter.
However, the agency's chief, Carl Heinz Daube, said he did not believe market conditions were right to issue a 30-year inflation-linked bond or a foreign currency bond.
Asked if the agency planned to issue either of these instruments in the final three months of this year, Daube told Reuters it watched the market continuously and would only act when market conditions were appropriate.
"At the moment, I don't see any corresponding market opportunity," Daube said in written answers to questions.
Daube said it was too soon to forecast issuance plans for next year, adding: "We don't yet know the exact indicators and our issuance plans will be closely linked to them."
For a table detailing the fourth quarter issuance plans, double click on: [ID:nBAF004262]
(Editing by John Stonestreet)