UPDATE 1-UK seeks reassurance in EU bank rules shakeup

* Britain seeks firm assurances on further dilution of power

* Czech EU Presidency confident of summit deal

* EU wants system up and running in 2010

(Adds Swedish finance minister, British diplomat)

By Mark John

BRUSSELS, June 17 (Reuters) - Britain will hold out for firm assurances at a European Union summit on Thursday that a drive for pan-EU banking supervision will not further weaken national powers to regulate its huge financial industry, diplomats said.

The 27-nation bloc wants to ensure it is better prepared for any repeat of the global financial crisis which was triggered by bad loans in the United States and spread quickly through the world's economies, pushing many into recession.

But Britain fears that three pan-EU watchdogs to be created next year could force countries to pick up the tab for banks that collapse on their watch.

Smaller countries such as Slovenia, Slovakia and Romania share Britain's concerns, diplomats said, adding that Germany was keen for clarification of the matter.