* PM Rajoy says constitution makes breakaway vote illegal
* Commission, Merkel say internal matter, respect the law
* Standoff raises fears for Spanish stability
* Calls for EU to urge Rajoy to soften stance, negotiate
BRUSSELS, Sept 21 (Reuters) - Spain's EU partners fear a mounting crisis over Catalans' latest push for independence, and their public support for Mariano Rajoy belies some disquiet that the conservative prime minister's hardline tactics might backfire.
Few foreign leaders will speak out on a domestic dispute in which government and courts in Madrid say the Catalan regional authorities in Barcelona are defying a constitutional ban on secession by preparing an independence referendum for Oct. 1.
The official European Union line is that Spanish democracy works and Spaniards should settle their affairs according to national laws. But the worsening standoff, with police arresting elected Catalan officials this week, is troubling officials and politicians abroad, who fear it may hurt Europe in various ways.
German Chancellor Angela Merkel, through a spokesman, echoed that line when asked by Reuters if she had had recent contact on the matter with Rajoy, a fellow conservative. While stressing it was an "internal Spanish matter", the spokesman also recalled that Merkel had in previous years told Rajoy that Berlin had "great interest in the maintenance of stability in Spain".
Less constrained by diplomatic protocol, other Europeans are starting to speak out: "Rajoy has put a lot of oil on the fire, fuelling the independentist debate. He has made a huge mistake," Ska Keller, the German co-leader of the Greens in the European Parliament, told Reuters as she called on those who may have influence with Rajoy to intercede and calm things down.
While publicly refusing to take sides on whether a Catalan breakaway is desirable, few European leaders would welcome it.
As with the 2014 referendum in Scotland, which unlike Catalonia's vote was held with the blessing of the central government in London, countries fear encouraging separatists at home: Belgium's Flemings, Italy's Lombards and so on. There is also a broader unwillingness as Britain exits from the EU to open another Pandora's box of economic uncertainty and legal disruption.
The EU's chief executive, Jean-Claude Juncker, was irked when Catalans seized on a remarks last week that they could join the EU after independence to suggest he favoured their cause.
The European Commission president said he had only reiterated the so-called "Prodi doctrine", dating back 13 years. This is that a breakaway state would have to leave the Union and could then only be let back in if it has gained independence in accordance with constitutional law in the member state it left.
Juncker also said that rich "regional traditions" should not become "elements of separatism and fragmentation of Europe".
Commission officials reject suggestions they are giving Madrid a soft ride on complaints that Spain's constitution is stifling Catalan rights while the EU is now threatening to suspend Poland over the Warsaw government's plans for constitutional change.
The Commission feels constrained by EU law not to take sides in Spain. But the European Parliament, led by the European People's Party (EPP), the centre-right bloc to which Rajoy, Merkel and Juncker belong, is more vocal in backing Madrid.
Antonio Tajani, the legislature's Italian conservative president, bluntly told a Catalan newspaper last week that to ignore Spain's constitution was to undermine the legal basis for the whole European Union: "Those are the rules," he said.
"This is not a tough line, this is a democratic and a legal line," the EPP's Spanish Secretary-General Antonio Lopez-Isturiz said, noting that Catalans voted for the constitution in 1978.
The EU legislature's centre-left group also backs the view that Spain's constitution must be respected above all.
Nonetheless, that legal approach is causing disquiet.
"There are growing concerns in Europe about the way Rajoy is handling this," said Steven Blockmans of the Centre for European Policy Studies. "They're trying to keep him on board, but with his tactics he's fuelling the independence debate."
Blockmans suggested Spain look at how his native Belgium had amended its constitution to devolve power. The leader of Belgium's powerful Dutch-speaking Flanders region issued a call on Thursday for "international mediation" in the Catalan crisis.
Andrew Duff, a British liberal former EU lawmaker now at the European Policy Centre think-tank, said EU leaders should be engaging quietly with Rajoy "to try to soften the sense of crisis". If they are already, they are not making it public.
"Rajoy hasn't played this very cleverly," Duff said. "From Brussels' perspective, this kind of domestic constitutional crisis cries out for political sophistication of a very high level, which we haven't yet seen, either from the Catalans or from Madrid. It puts the Commission in a very awkward position."
A senior EU official said Juncker was likely to go on exercising his right to stay largely silent on the issue for now: "It's like in those police shows," he said. "Anything you say can be held against you. It's better not to say anything." (Additional reporting by Andreas Rinke in Berlin and Francesco Guarascio in Brussels; Writing by Alastair Macdonald; Editing by Peter Graff)