* No abrupt liquidity withdrawal
* Sees Portuguese banks prepared, with access to funding
(Adds quotes)
LISBON, Oct 4 (Reuters) - Withdrawal of liquidity support measures by the ECB will be gradual and Portuguese banks will cope well with this, European Central Bank Governing Council member Carlos Costa said on Monday.
The ECB has been trying to phase out the emergency support given to money markets since 2008 in response to the financial crisis, although it has been forced to slow the process by the ongoing euro zone debt woes.
"The withdrawal will not be done overnight, but in a gradual manner," Costa, who is also Bank of Portugal governor, told reporters.
Costa also said he expects Portuguese banks to have the capacity to weather the transition when the liquidity operations are phased out. Costa said Portuguese banks have sufficient capital levels to finance their activities.
Costa expects Portugal to meet its budget goals after a new set of austerity measures announced by the government last week, which should help to reduce the country's risk perception and help the banks normalise access to interbank funding.
"The Portuguese banks will surely benefit from the reduction in sovereign risk after the government's measures. The access to the financing market will be progressively greater," said Costa who was appointed head of the Bank of Portugal in June when his predecessor Vitor Constancio became ECB vice-president.
In August Portuguese banks borrowed a record 49 billion euros from the European Central Bank.
Costa said earlier the country's banks need "access to alternative sources of financing to be able to reduce their dependency on liquidity operations by the Eurosystem."
Still, he said the country's banks were "very well-managed", and incorporated ECB liquidity withdrawal in their contingency plans. (Reporting by Sergio Goncalves and Shrikesh Laxmidas; editing by Stephen Nisbet)