* Sources: euro zone finance ministers to hold conference call Saturday
* Statement expected afterwards on Spanish aid request
* Spanish Deputy PM: No decision made, awaiting audit figures
* Fitch downgrades Spain 3 notches, says banks need 60-100 bln euros
(Adds quote, details)
By Julien Toyer and Matthias Sobolewski
MADRID/BERLIN, June 8 Spain is expected to ask the euro zone for help with recapitalising its banks this weekend, sources in Brussels and Berlin said on Friday, becoming the fourth country to seek assistance since Europe's debt crisis began.
Five senior EU and German officials said deputy finance ministers from the single currency area would hold a conference call on Saturday morning to discuss a Spanish request for aid, although no figure for the assistance has yet been fixed.
Later the Eurogroup, which consists of the euro zone's 17 finance ministers, will hold a separate call to discuss approving the request, the sources said.
"The announcement is expected for Saturday afternoon," one of the EU officials said.
The dramatic development comes after Fitch Ratings cut Madrid's sovereign credit rating by three notches to BBB on Thursday, highlighting the Spanish banking sector's exposure to bad property loans and to contagion from Greece's debt crisis.
"The government of Spain has realised the seriousness of their problem," a senior German official said.
He added that an agreement needed to be reached before a Greek election on June 17 which could cause market panic and increase the threat of Athens leaving the euro zone if left-wing parties opposed to Greece's EU/IMF bailout win.
The EU and German sources spoke to Reuters on condition of anonymity due to the sensitivity of the matter.
Spain's deputy prime minister, Soraya Saenz de Santamaria, said the government needed to have at least a preliminary estimate of how much extra capital the banks needed before taking a decision.
The International Monetary Fund is expected to announce imminently the results of its own audit.
"It's important to respect the proceedings because it's important to know the ground," she told reporters, while not denying that the Eurogroup would hold a call on Spain's needs.
"Before taking any kind of decision one should at least have a first estimate of the ground and the ground means figures."
The European Commission's spokesman on economic affairs said Spain had made no request for aid but the euro zone stood ready to help.
"If such a request were to be made, the instruments are there, ready to be used, in agreement with the guidelines agreed in the past," Amadeu Altafaj said. "We are not at that point."
European Central Bank Vice President Vitor Constancio said the call for assistance was expected soon.
"It is expected that Spain will formulate a request for aid exclusively for banks recapitalisation ... there has to be an expression of will to have such a programme for Spanish banks, and one may hope it happens rather swiftly," Constancio said on Portuguese radio.
If a request is made, Spain is expected to ask for help from the euro zone's 440 billion euro bailout mechanism, known as the European Financial Stability Facility. The amount will depend on the IMF audit and a separate report due by June 21 from two independent assessors, Oliver Wyman and Roland Berger.
The process is likely to involve bonds from the EFSF being injected into Spanish banks with no new capital raised, a euro zone official said on Friday. The bonds can then be used as collateral in operations with the European Central Bank, allowing the banks to access ECB liquidity. [ID:nL5E8H87SD]
Financial industry sources told Reuters on Thursday that the IMF report had estimated Spanish banks' minimum capital needs at 40 billion euros ($50 billion), rising to 90 billion euros for a fuller recapitalisation.
Officials in Spain said the parameters for the IMF and the private-sector audits were effectively the same, meaning Spain could make the request for aid on the basis of the IMF figures rather than having to wait for the other assessment.
The euro zone has been under strong pressure from the United States, China, Canada and other major partners to take swift, decisive action to prevent the debt crisis spreading and causing greater damage to the world economy.
U.S. President Barack Obama said European leaders appeared to be moving in the right direction, but he also emphasised that he was being careful not to tell Europe what to do.
"They understand the seriousness of the situation and the urgent need to act," Obama told a news conference.
Speaking in Berlin, German Chancellor Angela Merkel said she was not pressing any country to take a bailout, saying it was up to Spain to decide what it wanted to do: "It's down to the individual countries to turn to us," she said.
"That has not happened so far, and therefore (we) will not exert any pressure."
Fitch said the cost to the Spanish state of recapitalising banks stricken by the bursting of a real estate bubble, recession and mass unemployment could be between 60-100 billion euros ($75-$125 billion) - or 6 to 9 percent of Spain's gross domestic product. The higher figure would be in a stress scenario equivalent to Ireland's bank crash.
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Spain's Rajoy tries to lead after rock start [ID:nL5E8H55RO]
Too-big-to-fail Spain ponders bank rescue [ID:nL3E8H7AC2]
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Euro zone crisis in graphics r.reuters.com/hyb65p
European shares and the euro EUR= fell amid mounting concern over Spain following the Fitch downgrade although the Spanish stock market climbed nearly two percent on the prospect of help for the banks. [.EU]
While Spain would join Greece, Ireland and Portugal in receiving a European financial rescue, officials said the aid would be focused only on its banking sector, without taking the Spanish state out of credit markets.
That would be crucial to avoid overstraining the euro zone's rescue funds, which would struggle to cover Spanish government borrowing needs for the next three years plus possible additional assistance for Portugal and Ireland. [ID:nL3E8H7AC2]
"I think they're trying to get a lighter support package, where the money is headed to the banks and not for financing the fiscal deficit," said Vincent Chaigneau, head of rates strategy at Societe Generale. "But you need to know the details, the size of the programme and who participates."
The sudden escalation of the Spanish banking crisis, dramatised by last month's hasty nationalisation of troubled lender Bankia (BKIA.MC), has contributed to raising Italy's borrowing costs towards danger levels as well as Spain's.
Conditions in the plan would be light, related to the banks and would probably not add to the austerity measures and structural economic reforms which Prime Minister Mariano Rajoy's government has already put in place, EU and German sources said.
A "bailout lite" would help salve Spanish pride. Spain is the world's 12th largest economy and No. 4 in the euro zone. EU and German officials have cited national pride as a barrier to requesting a full assistance programme.
The European Commission and Germany both agreed in principle last week that Spain should be given an extra year to bring its budget deficit down below the EU limit of 3 percent of gross domestic product because of a deep recession.
(Additional reporting by Luke Baker and Jan Strupczewski in Brussels, Andreas Rinke in Berlin and Jesus Aguado and Fiona Ortiz in Madrid; Writing by Paul Taylor and Luke Baker; Editing by Mike Peacock and Alastair Macdonald)
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