By Vladimir Soldatkin and Tom Bergin

MOSCOW/LONDON (Reuters) - BP's partners in its Russian venture TNK-BP rejected the UK oil major's attempts to settle a dispute caused by its $18 billion tie-up with Rosneft, casting further doubt on the deal.

"Now is the time for sensible proposals from BP to resolve the problems that have been created," Stan Polovets, chief executive officer of AAR, the consortium that represents the four billionaires who own half of TNK-BP said in a statement.

BP believes the Russians are angling to be bought out of TNK-BP at a high price -- possibly over $35 billion.

BP Chief Executive Bob Dudley said Thursday BP had offered to do this -- sources close to the matter said the oil giant offered $27 billion in conjunction with Rosneft -- but he added BP would not overpay.

Polovets said AAR was not planning to sell out and simply wanted BP to conduct the planned $16 billion share swap and $1.2 -$2 billion Arctic Sea exploration deal with Rosneft, through TNK-BP instead, in line with the TNK-BP shareholder agreement.

AAR convinced an arbitration panel to block both elements of the Rosneft deal pending a settlement between the two sides.

Analysts and investors are growing increasingly pessimistic the deal, which was supposed to signal BP's recovery after the Gulf of Mexico oil spill, will be sealed.

"We believe it is unlikely that the final decision from the panel will wave the deal through," analysts at the Royal Bank of Scotland said in a research note.

When Chairman Carl-Henric Svanberg was asked at BP's annual general meeting Thursday if he was confident the Rosneft tie-up would be completed, he could only say that he was "realistic."

BP declined to comment Friday but company sources have said it felt the $27 billion offer for AAR's TNK-BP stake was realistic.

CEO Dudley will take part in a meeting of the Russian Geographical Society Friday which Prime Minister Vladimir Putin is also expected to attend.

Thursday, BP and Rosneft extended the deadline to complete the share swap element of the deal by a month, giving more time for BP and its oligarch partners in TNK-BP to hammer out a settlement.

"We trust that BP will use the extension it has got from Rosneft to ensure that both the Arctic opportunity and the share swap are pursued through a structure consistent with BP's obligations under the TNK-BP shareholder agreement," Polovets said.

It is unclear where TNK-BP would get the cash to buy $8 billion in Rosneft shares and Rosneft has said it is not interested in having TNK-BP, which has no offshore experience, participate in the exploration venture.

BP shares traded down 0.2 percent at 0849 GMT, against a 0.1 percent drop in the STOXX Europe 600 Oil and Gas index.

(Editing by Erica Billingham)