* EU budget to cover 1.4 bln euro funding gap, says exec

* Research budget among casualties of funding reallocation

* Proposal sees no extra money from EU states for ITER



By Charlie Dunmore

BRUSSELS, July 20 (Reuters) - Cash-strapped European Union governments will not have to provide fresh money in order to fill a 1.4 billion euro ($1.81 billion) funding gap in a project to commercialise nuclear fusion -- the process that powers the sun.

Increased complexity and rising construction costs have seen the price tag for the International Thermonuclear Experimental Reactor (ITER) project rise to 16 billion euros ($20.76 billion), while the EU's share has more than doubled.

Member states crippled by the financial crisis said last week that money from the current EU budget -- including funds originally earmarked for other research projects -- should be diverted to meet the shortfall in the EU's contribution for the years 2012-2013.

In a proposal adopted on Tuesday, the European Commission said that 460 million euros should be diverted from the bloc's research framework programme (FP7) to ITER.

That will anger many scientists, who have argued that such a move would deprive them of much-needed EU funds at a time when national governments are cutting their research spending.

The remaining 940 million euros should come from unspent funds from other parts of the EU budget, the Commission said, although it did not specify from which areas the money was being diverted.

"The EU needs to show the vision and the resolve beyond the immediate financing difficulties and meet its international commitment to this project," the EU's budget and research commissioners said in a joint statement.

The proposal must now be agreed jointly by EU governments and lawmakers after the European summer break.



CONTROVERSIAL TECHNOLOGY

The lack of a final EU agreement will not prevent the bloc and its partners from agreeing the scope, schedule and costs of the overall project at a meeting of ITER's international council next week, a spokesman for the Commission told Reuters.

The ITER council also includes Japan, India, China, Russia, South Korea and the United States.

At stake is the goal of harnessing the power of nuclear fusion -- the process that powers the sun and other stars -- in a reactor currently being built in Cadarache, southern France.

Scientists have shown the process can be recreated on Earth, combining simple hydrogen isotopes to release vast amounts of energy, but so far it has not been demonstrated on an industrial scale. Nor have previous experiments released more energy than they consume.

If it works, by 2020 the project will be capable of generating about 500 megawatts of fusion energy -- clean power with no climate-damaging emissions and little radioactive waste.

But environmentalists and others have said it is irresponsible to spend billions of euros on unproven technology, and argued the money would be better spent on techniques that are already available such as renewables and energy efficiency. (Reporting by Charlie Dunmore)





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