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UPDATE 1-Austria-based FACC signs $600 mln contract with Airbus

(Adds detail, medium-term sales target, background)

VIENNA, Sept 4 (Reuters) - Austria-based aerospace company FACC has won a 500 million euro ($596 million) contract with planemaker Airbus to supply stowage compartments and ceiling panels, it said on Monday.

Airbus's order from its long-standing supplier comes as Europe's largest aerospace and defence group is locked in a fierce row with the Austrian government.

Vienna prosecutors are investigating Airbus and its chief executive for possible deception and fraud linked to a 2003 jet order, allegations Airbus says are totally unfounded.

The Austrian defence ministry's move to consider barring Airbus from a planned tender for 12 small military helicopters has also strained ties recently.

FACC's business relations with Airbus have not been influenced by the dispute, said a spokesman for the company which is headquartered in the province of Upper Austria close to the German border.

FACC, which has been providing interior fittings for Airbus planes for more than 15 years, said the order would contribute substantially to its 2020/21 sales target of 1 billion euros ($1.2 billion).

The group posted revenues of 706 million euros in the year ended Feb. 28. It did not give a forecast for 2017/18.

FACC, in close cooperation with Airbus, will develop larger overhead stowage compartments for the A320 family, planned to be the biggest for short and medium-haul aircraft, the Chinese-owned company said. Mass production is to start in late 2018.

In May, FACC hired as chief operating officer Andreas Ockel, who was in charge of Airbus' assembly of its A320 aircraft in China.

($1 = 0.8400 euros) (Reporting by Shadia Nasralla and Kirsti Knolle; Editing by Louise Heavens and Mark Potter)