* Germany sells 3.4 bln euros of 10-year Bunds * Euro zone doubts support sale * Strongest demand this year after recent sell-off By Kirsten Donovan and Michelle Martin LONDON/BERLIN, Aug 8 (Reuters) - Investors snapped up safe-haven German 10-year bonds at auction on Wednesday, reflecting uncertainty over policymakers' latest plans to get to grip with the three-year old euro zone debt crisis. A sharp fall in Bund prices since the European Central Bank said last week it may resume buying Spanish and Italian bonds to cut their borrowing costs, has pushed German yields higher, leading to the strongest demand at a sale of its 10-year debt this year. German bonds, seen as the least risky euro zone debt, have been the asset of choice for those investors who must keep funds in euro-denominated assets as the debt crisis has threatened to engulf Spain and Italy. Ten-year yields hit a record low of 1.13 percent in late July but have risen more than 20 basis points in the secondary market since the ECB said after a policy meeting on Aug. 2 it may revive its bond-buying programme if Spain and Italy first sought help from the currency bloc's rescue funds. However, a lack of detail in the proposed plan has seen the rally in peripheral debt fade and the sell-off in Bunds pause . "The market is getting more cautious and waiting for more action from the ECB and from the governments," said ING rate strategist Alessandro Giansanti. "(The auction) is an indication that the market is still worried that this is not the end of the crisis." Wednesday's sale - the last of the July 2022 Bund before a new 10-year bond is launched next month - attracted bids worth 1.8 times the amount on offer, the highest at a 10-year auction this year. When the bond was launched in April, the auction failed to attract enough demand to cover the amount on offer, the only time this has happened at a German debt sale this year. The average yield at Wednesday's sale rose to 1.42 percent from 1.31 percent at the previous sale in July but was still below the 2012 average of 1.66 percent. "In outright terms,(the bond) is probably at an attractive yield level to many," said Credit Agricole rate strategist Peter Chatwell. The so-called "tail", which is the difference between the lowest and the average bid and a measure of the bidding quality, was zero cents, the same as at the last two sales. The amount retained to be sold in the secondary market at a later date was 15 percent, compared with an average this year of 18.9 percent - another sign of buoyant demand. For full auction details see. Ten-year Bund yields were 4.5 basis points lower on the day in the secondary market at 1.43 percent, with Bund futures up 43 ticks at 142.76 after a near three point sell-off since last Thursday, when the ECB held its policy meeting.

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