* EERC group says sees pilot shortfall
* Ryanair says more than enough pilots
* Says near deals with major union (Adds quotes from Ryanair executive)
DUBLIN, Feb 26 (Reuters) - A pilot group that helped spearhead a staff revolt at Ryanair last year has called on Chief Executive Michael O'Leary to resign in the latest sign of strains in staff relations at Europe's largest low-cost airline.
The European Employee Representative Council (EERC), an unofficial pan-European body set up last year by Ryanair pilots to mobilize for better conditions, said it believed large numbers of pilots were leaving and that O'Leary had failed to resolve the problem.
Ryanair rejected the letter, with Chief People Officer Eddie Wilson describing it as "bizarre" and "ridiculous," adding that the airline had more than enough pilots to run its schedule.
Several pilot unions have said that the EERC represents a significant number of the airline's more than 4,000 pilots, but Ryanair management has repeatedly dismissed it as a front for "competitor pilot unions."
In a letter to O'Leary seen by Reuters, the EERC said that the number of pilots leaving the airline had not decreased since a shortage of standby pilots last year led the airline to cancel 20,000 flight and trim its growth plans.
Further cancellations are inevitable and O'Leary must resign for the situation to improve, the letter said: "Do the decent thing now and leave before you do any further damage."
It repeated an offer to help convince pilots to work extra hours and said suggestions by Ryanair that strike action may be imminent as "alarmist."
Ryanair's Wilson, speaking to journalists at a press conference in Dublin, said the rate of retention of pilots had "much improved" in recent months compared with the same period the previous year due to the pay offer.
The Irish airline, Europe's largest low-cost carrier, averted widespread strikes ahead of Christmas by announcing plans to recognize pilots' unions for the first time in its 32-year history.
But talks with pilot unions to formalize union recognition and improved terms have stalled in recent weeks. While Ryanair says talks are ongoing in seven countries, only British union BALPA has signed a recognition agreement.
Wilson said Ryanair was "almost there" in reaching agreement with the Italian pilot union, one of its three biggest markets, along with Britain and Spain.
Wilson said 96 percent of pilots in Spain and 80 percent of pilots in Ireland were receiving a 20 percent pay increase that some unions have resisted on the grounds that the conditions of acceptance might undermine future talks.
Ryanair is trying to find a pragmatic solution with unions in a "sweet spot" where staff conditions are improved, but that the airline's pioneering low-cost model is not undermined, Wilson said.
"The world isn't going to change drastically beyond this model," he said. (Reporting by Conor Humphries, editing by Louise Heavens)