BERLIN, Nov 27 (Reuters) - German parties have agreed that primary responsibility for rescuing banks should lie with EU member states, placing high hurdles on the use of funds from the bloc's common rescue mechanism, according to a coalition deal clinched early on Wednesday.

In the 185-page agreement, Chancellor Angela Merkel's conservatives and the centre-left Social Democrats (SPD) back the creation of a European resolution body for systemically-relevant, cross-border banks, and a common resolution fund financed by bank levies.

But until this fund has built up sufficient liquidity, the document makes clear that individual member states will have responsibility for dealing with their stricken banks.

The agreement specifies that the European Stability Mechanism (ESM) can only be used for direct recapitalisation of banks when all other avenues have been exhausted. Funds available for this purpose would be limited to 60 billion euros.