UPDATE 2-Spain blocks quick appointment of ECB candidate

* Spain blocks 'fast-track' appointment of central banker

* Move likely to further delay filling of ECB board seat

* Dispute shows increasing power of European Parliament

* Unclear if Spain will nominate its own candidate

BRUSSELS, Nov 5 (Reuters) - Spain has blocked the appointment of Yves Mersch to the European Central Bank's executive board, delaying the process of filling a post that is critical to tackling Europe's debt crisis.

It follows opposition from the European Parliament, which voted against Luxembourger Mersch because it wants more women in the European Union's higher echelons.

EU leaders can still push through the appointment, but will have to do so face-to-face at one of their upcoming summits before the end of the year, probably in December.

The European Council, which represents EU member states, had tried to secure Mersch's appointment via a ``written procedure'', a fast-track method that would have put an end to the months-long battle to confirm the banker's candidacy.

But Spain said on Monday it was opposed to using such a procedure.

Spanish officials said there had been insufficient discussion of Mersch's candidacy among EU leaders and they wanted to ensure that a proper debate took place, hence their decision to block his fast-track approval.

The European Council said the issue would be discussed soon.

``The issue will be on the agenda of an upcoming meeting in the European Council with the objective of taking the formal decision,'' it said in a short statement.

EU leaders will meet in Brussels on Nov. 22-23, when they are scheduled to discuss the next long-term EU budget, and again on Dec. 13-14, when they will discuss economic issues.

If a unanimous decision on Mersch cannot be reached, then a weighted-voting system will be used, officials said. That will likely ensure Mersch is appointed since Spain, which is the only country to oppose Mersch, could not block his appointment alone.

Mersch, a conservative monetary policymaker whose candidacy is strongly backed by Germany, was nominated to the six-person executive board, the ECB's top decision-making forum, in July.

Leaving the position vacant for much longer could create management strains at the bank, which is playing a central role in trying to keep the euro zone stable through the crisis.

ECB President Mario Draghi told the European Parliament last month that he wanted Mersch's nomination approved.

Spain's move is a victory of sorts for the European Parliament, which has long opposed Mersch's appointment on gender grounds, saying not enough effort has been made to find a suitable woman for the high-profile post.

There are no questions about Mersch's qualification in terms of the job itself.

It is not clear if Madrid, which put forward a candidate of its own to fill the seat left vacant when Jose Manuel Gonzalez Paramo stepped down, will re-nominate a rival for Mersch, a hawkish banker favoured by Germany.

If Spain were to nominate a female alternative to Mersch, Belen Romana Garcia, a former director-general of the treasury, is one name that has been mentioned.

Mersch has kept silent during the confirmation process, even after the European Parliament came out against him last month in a non-binding vote, citing his gender only.

The parliament's frustration has been focused on the European Council, which it says has not done enough to come up with strong women for the post. The Council has said it is up to member states to put forward candidates, and if no women are proposed, there is little it can do about it.

Analysts have said that if Spain had nominated former finance minister Elena Salgado for the board when Gonzalez Paramo announced that he was stepping down, she would have been a shoo-in instead of Mersch.

But the Spanish government decided to go with the ECB's top lawyer, Antonio Sainz de Vicuna, whose nomination did not succeed, opening the way for Mersch to be appointed.

Gertrude Tumpel-Gugerell and Sirkka Hamalainen of Finland are the only two women to have occupied posts on the ECB's executive board since it was set up in 1998. There are currently no women at the top of the central bank.