* New govt planning overseas drive to restore credibility
* Moody's downgrades Irish banks after sovereign cut
* Irish govt considering 2 bln euros of asset sales
DUBLIN/LONDON, April 18 (Reuters) - Ireland kickstarted a diplomatic offensive to restore its credibility on international markets on Monday with a pledge to avoid any action that would further rattle euro zone debt markets.
Talk of a Greek restructuring, denied by the country's finance minister, has put investors on edge and Prime Minister Enda Kenny balked at a suggestion that Dublin could use the threat of default to extract concessions from European partners.
"We have no intention of causing mayhem here," Kenny told BBC radio.
The former primary schoolteacher, propelled to power in February, is in London for talks with British Prime Minister David Cameron as part of a drive to highlight recent progress in tackling Ireland's financIal crisis.
Investors have given a cautious thumbs-up to government efforts to deal with the country's banks, at the root of the crisis, with tough stress tests, a radical restructuring and a pledge to recapitalise them by a further 24 billion euros.
But concerns a Greek restructuring could trigger contagion coupled with Ireland's spluttering growth prospects have undone much of the positive sentiment.
The premium investors demand to hold 10-year Irish paper over benchmark German Bunds is currently around 653 euros, some 58 basis points wider than a near two-month low of 595 bps hit earlier this month.
Moody's rating agency downgraded Ireland's government-guaranteed banks by two notches on Monday following a sovereign downgrade last week, meaning that all the lenders are now classified as junk.
ASSET SALES
Investors are concerned Ireland's economy will not be able to grow fast enough to sustain its debt burden since the International Monetary Fund and European Union arranged an 85 billion euro ($123 billion) bailout last year.
Greece, whose debt burden is expected to approach 160 percent of annual output by 2013, has laid out plans to sell stakes in key state firms to quell debt worries.
Kenny said his government was considering which of Ireland's state assets will be sold to raise around 2 billion euros. A report by University College Dublin economics professor Colm McCarthy outlined five billion euros worth of proposed sales.
"The government will consider Colm McCarthy's report and we will make decisions in respect of what's feasible and what's not feasible," he told Irish state broadcaster RTE.
Ireland's new coalition administration has vowed to restore the country's international reputation after the humiliation of an EU-IMF bailout and a slew of financial scandals.
Deputy Prime Minister Eamon Gilmore is meeting European Union ambassadors in Dublin on Monday to update them on the government's economic plans.
Ireland's own ambassadors are being recalled in the next few months for briefings on how to promote the country overseas.
Kenny will make a speech to British investors in the City of London later on Monday and said the trip would be followed up with a visit to New York in a couple of weeks.
"I will be spelling out the message that we are not the same as we were. We are in a very different place now." (Reporting by Adrian Croft and Carmel Crimmins; editing by Stephen Nisbet)