UPDATE 1-EU governments wary of GM crop overhaul plans

* France insists on a review of EU GM assessment criteria

* Opposes GM cultivation proposal before review, says Borloo

* Spain opposed to Commission's proposals, says Espinosa

(Adds quotes, details, background)

By Charlie Dunmore

LUXEMBOURG, June 11 (Reuters) - France said on Friday it would not support draft proposals to allow European Union governments to grow or ban genetically modified (GM) crops before a complete review of the bloc's GM approval system.

The EU's executive, the European Commission, argues that giving member states the option of banning GM cultivation will remove their current opposition to approving new varieties, and plans in July to table proposals seen by Reuters.

But France's Environment Minister Jean-Louis Borloo said the proposals did not address the demand for a complete review of the bloc's assessment system for GM crops, made by all 27 EU nations in December 2008.

"There is no way we would swap subsidiarity for the absolute need for a tightening of the assessment criteria," Borloo told journalists before a ministers' meeting in Luxembourg to discuss the EU's GM approval system.

"No new authorisations can be approved in the current circumstances," he added.

While France did not rule out support for the Commission's plan if its conditions were met, Spain's Agriculture Minister made it clear that she opposed the proposals.

"Moving to authorisations by each country could take us to the beginning of re-nationalisation, something we have never supported in Spain," Elena Espinosa said before the meeting.

Spain's opposition comes despite the fact that it currently grows more GM crops than any other EU nation.

SCIENTIFIC ASSESSMENT

EU governments' demand for a review of the GM assessment system in 2008 was sparked by concerns that the bloc's scientific advisory body, the European Food Safety Agency (Efsa), was ill-equipped for the job.

A key complaint was that Efsa was too reliant on data provided by biotech multinationals including Monsanto, BASF and Syngenta for its assessments, and lacked the expertise required to carry out its own analyses.

But the Commission has yet to respond to the demand, clearly hoping that its cultivation proposals would be enough to ease member states' fears.

If approved, the plan could see a sharp growth in commercial cultivation of GM crops in countries already growing them, such as Spain, Portugal and the Czech Republic.

Existing GM bans in countries including France, Italy and Austria would also be confirmed under the plans, and other countries would be free to introduce new bans at any time.

But a Belgian EU diplomat was among those who warned that the plan could fragment the EU's cherished internal market, and leave the bloc open to challenges in the World Trade Organisation by countries such as the United States, who have complained that the EU's GM policies are unscientific.

Environmental groups such as Greenpeace and Friends of the Earth have strongly criticised the proposals, saying they confirm the Commission's determination to push GM crops onto an unwilling European public. (Additional reporting by Julien Toyer in Luxembourg and Martin Roberts in Madrid; Editing by Keiron Henderson)