* German Fraport, Greek Copelouzos offered 1.23 bln euros
* The group will lease 14 Greek regional airports for 40 years
* The privatisation deal will be Greece's biggest since 2010 (Adds privatisation agency, Fraport comments, detail)
ATHENS, Nov 25 (Reuters) - German airport operator Fraport and Greek energy firm Copelouzos bid 1.23 billion euros to lease and operate 14 Greek regional airports, the country's biggest privatisation deal since its debt crisis.
The offer from Fraport and Copelouzos unit Slentel, was "significantly higher" than the second best bid, Greece's privatisation agency HRADF said on Tuesday, making the group the preferred bidder to run airport terminals at some of the country's most popular tourist islands such as Rhodes and Corfu.
Greece has signed privatisation deals worth about 5.4 billion euros ($6.7 billion), raising about 3 billion euros in cash, since it was bailed out four years ago by the European Union and International Monetary Fund.
But the proceeds are far below an original target of 22 billion euros for 2010-2013, mainly due to regulatory snags.
Argentina's holding company Corporation America with Greek engineering firm Metka, and France's Vinci with Greek contractor Ellaktor were the other two bidders in the final round.
"The bids submitted by the world's top airport operators is the biggest proof of international investors' confidence in our country's growth prospects," HRADF's chairman Emmanuel Kondylis said in a statement.
The airport leases will be the country's biggest privatisation deal under an ambitious asset sales programme, which is part of the 240 billion euro bailout.
The winning joint venture will also pay an annual rent of 22.9 million euros, linked to inflation, for the airports. The deal is expected to conclude in the first quarter of 2015, HRADF officials told Reuters.
The German-Greek group is expected to spend about 330 million euros in the first four years to upgrade the airports, that will be leased for 40 years. Investment is seen totalling 1.4 billion euros over the period time.
Fraport said it would post an accumulated net loss of about 100 million euros in the first three years and that it expected to consolidate the airports in its results by the end of 2015.
Copelouzos also owns a 5 percent stake in Athens' main airport which Greece plans to put under the hammer next year. (1 US dollar = 0.8057 euro) (Reporting by Angeliki Koutantou; editing by David Clarke)