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UPDATE 1-Maine braces for possible government shutdown amid budget battle

(Adds committee's budget plan)

June 30 (Reuters) - Maine lawmakers will vote on a budget plan on Friday that would repeal a 3 percent tax hike on those who earn at least $200,000 and increase education funding to try to avert a partial government shutdown threatened by Governor Paul LePage.

If legislators do not pass a budget by midnight EDT (0400 GMT Saturday), LePage, a second-term Republican, said he would declare a state of civil emergency that would keep state police, prisons, parks and tax collection services operating but close most of the rest of state government.

"I will tell you this: If they put a tax increase, ready for a shutdown. End of story," LePage said in a Thursday interview on Maine's WGAN radio. "They're playing chicken at 100 miles per hour, and I'm telling you something: You want to play chicken, let's play chicken."

A six-member bipartisan budget committee recommended a two-year, $7.1 billion spending plan to the full legislature late on Thursday, but it is unclear if legislative leaders can garner the two-thirds support needed for passage.

The plan repeals a measure that voters approved in November to impose an additional 3 percent income on tax state residents who earn more than $200,000 a year. It also increases public education funding by $162 million.

Maine state law gives the governor 10 days to respond to any budget passed by the legislature. LePage warned on Thursday he planned to wait that long before vetoing any budget that raises taxes. Most of the government would be shut during that time.

Delays this year in negotiations leave the heavily tourist-dependent state facing the prospect of a partial government shutdown at the start of the long July 4 holiday weekend.

A Maine advocacy group sued the state in federal court on Thursday, seeking an order that would ensure that public assistance payments continue uninterrupted to the 450,000 people, about one in three residents, who receive them.

In 1991 Maine's government shut down for several weeks as a result of a budget impasse, and lawmakers reached a deal only after crowds of furloughed state workers picketed the capitol in Augusta. (Reporting by Scott Malone in Boston and Brendan O'Brien in Milwaukee; Editing by Richard Chang and Lisa Von Ahn)