* Commission cannot force states to apply recommendations
* Says expects to propose new safety law next year
* Nuclear stress tests should not be a "one-off"
(Adds reaction) By Barbara Lewis
BRUSSELS, Oct 2 (Reuters) - Europe's nuclear reactors need investment of 10-25 billion euros, a draft European Commission report said, following a safety review designed to ensure a disaster like Japan's Fukushima cannot happen.
The Commission is expected to finalise the stress test report by Thursday and it will be debated by EU ministers later this month.
After that, the Commission intends in 2013 to propose new laws, including on insurance and liability to "improve the situation of potential victims in the event of a nuclear accident", the draft seen by Reuters said.
Of the 134 EU nuclear reactors grouped across 68 sites, 111 have more than 100,000 inhabitants living within 30 km (18 miles).
Safety regimes vary greatly and the amount that needs to be spent to improve them is estimated at 10-25 billion euros ($13-32 billion) across all the reactors, the draft says.
France's nuclear watchdog has already said the country, which relies on nuclear power for about 75 percent of its electricity, needs to invest billions of euros.
The lesson of Fukushima was that two natural disasters could strike at the same time and knock out the electrical supply system of a plant completely, so it could not be cooled down.
The stress tests found that four reactors, in two different countries, had less than one hour available to restore safety functions if electrical power was lost.
By contrast, four countries operate additional safety systems fully independent from the normal safety measures and located in areas well-protected against external events. A fifth country is considering that option.
The main finding, the draft says, is that there are "continuing differences" between member states' safety regimes. It also says provisions to ensure the independence of national regulators are "minimal".
The stress tests are a voluntary exercise to establish whether nuclear plants can withstand natural disasters, aircraft crashes and management failures, as well as whether adequate systems are in place to deal with power disruptions.
All 14 member states that operate nuclear plants took part, however, as did Lithuania, which is decommissioning its nuclear units. From outside the 27-member bloc, Switzerland and Ukraine joined in the exercise.
The tests were meant to have been completed around the middle of the year, but countries were given extra time to assess more reactors.
Non-governmental organisations are among those who have criticised the process as not going far enough and having no powers to force the shut-down of a nuclear plant.
"The stress tests only give a limited view," said Roger Spautz, energy campaigner at Greenpeace, which believes nuclear power should be phased out.
He cited independent research earlier this year which said some European reactors needed to be shut down immediately, as well as the example of Belgium, where the Doel 3 and Tihange 2 reactors have been halted because of suspected cracks.
The draft report says the stress tests are not a one-off exercise and will be followed up. Existing legislation also needs to be enforced, it said.
The deadline for passing the existing nuclear safety directive into national law was July 2011. The Commission started infringement proceedings against 12 member states that missed it.
To date, two have still not complied but the report did not specified which ones.
The Commission does not comment on leaked drafts.
But on Monday, the EU energy spokeswoman said the recommendations were being finalised and would not be "very, very detailed".
In France, the nuclear watchdog and operator EDF said they would not comment before seeing the official report.
($1 = 0.7749 euros)
(Additional reporting by Francesco Guarascio in Brussels and Michel Rose and Marion Douet in Paris; Editing by William Hardy and Pravin Char)
Keywords: EU NUCLEAR/TESTS