UPDATE 2-German regulator: 'no euro zone bank watchdog until 2014'

* German regulator BaFin sceptical about deadline

* BaFin says does not understand roadmap to ECB bank regulation

* Bank of France, Bank of Spain, Bank of Italy decline to comment

(Adds comments from Dutch Central Bank)

FRANKFURT, Oct 9 (Reuters) - Plans to establish a euro zone bank regulator by Jan. 1, 2013, may be delayed by a year, Germany's markets regulator said on Tuesday, a potential setback to efforts to help distressed euro zone countries and their banks.

European leaders agreed at the end of June to set up a single supervisor to oversee 6,000 banks in Europe, but Elke Koenig, head of Germany's markets regulator BaFin, said the original deadline to start such supervision was unrealistic.

"I could imagine that we get there in January 2014. That's a guess," she told German television station ARD on Tuesday, adding this was her personal view.

Koenig argued that efforts to centralise supervision should proceed with caution, a view at odds with several euro zone policymakers, but in line with German Finance Minister Wolfgang Schaeuble, who last month objected to giving the ECB sweeping powers.

The speedy establishment of common banking supervision is necessary to pave the way for the direct recapitalisation of lenders via the European Stability Mechanism (ESM), a euro zone bailout fund which came into force on Monday.

Propping up weak banks is seen as a way to break the vicious circle linking indebted governments and their troubled lenders. Doubts over the solidity of Spain's finances, for example, are inextricably linked to its weak banking sector.

The Dutch Central Bank said on Tuesday that policymakers should quickly give the European Central Bank the tools to supervise major lenders and to enable the ESM to directly recapitalise troubled banks if shareholders or national governments proved unable.

Germany, the euro zone's economic heavyweight, has criticised efforts to allow the ECB to supervise all euro zone lenders, claiming the ECB will be overstretched.

In reality, the ECB will not be in day-to-day charge of supervision, which will still lie with national and local regulators. But the ECB is expected to leave national supervisors with less wiggle room to adopt special rules designed to protect their home market.

Germany's landesbanken, for example, are currently allowed to keep using a special form of non-voting capital as a way to meet tougher rules on capital safeguards.

The ECB's president Mario Draghi commented on the timetable for creating a new supervisor on Tuesday.

"The ECB is not supposed to take over supervision in three months' time and do it. There is a phase-in time. We foresee that one year will be needed to adapt all the structures," Draghi told the European parliament.

As a first step, the ECB is set to take responsibility for supervising banks which have received state aid beginning 2013. From mid-2013 the ECB will add systemically relevant institutions, before finally overseeing all euro zone banks by 2014.

Upon being asked whether a January deadline for Euro zone bank supervision was realistic, The Bank of France, the Bank of Spain and the Bank of Italy declined to comment.

Gerard Rameix, head of the French markets watchdog AMF, said he had heard nothing to suggest there would be a change to the timeframe. "I think they are playing on words a bit. If they are talking about the utmost end of the process, then they are maybe not wrong," Rameix said.

Late on Monday Koenig said that although she supported the idea of common supervision in principle, she hasn't understood how the transition from national to pan-European supervision will work in practice.

"I support the idea of a strong European regulator. But I have not seen a roadmap of how we get there," she said.

"The last thing we can afford is to have an interregnum between those who are no longer responsible (for supervision) and those who are not yet in a position to act," Koenig said.

Earlier this month ECB policymaker Joerg Asmussen warned that tapping the ESM for direct bank recapitalisation will only be possible once supervision has been set up.

And last month, Germany, the Netherlands and Finland insisted that the ESM should not be used to solve "legacy issues", essentially saying that highly indebted banks in Spain, Ireland and Greece will remain the responsibility of those countries' governments.

The Basel Committee on Banking Supervision said last week the EU was failing to apply the Basel III capital requirement rules for banks because it softened up a definition of what qualifies as core capital.

Basel III says it must be common equity capital while Germany has pushed hard to include what some regulators see as less proven financial instruments which are widely used in the German public sector banking arm of Landesbanks.

(Reporting by Kerstin Doerr in Berlin; Edward Taylor in Frankfurt; Jean-Baptiste Vey and Lionel Laurent in Paris; Jesus Aguado Gonzalez in Spain, Stephen Jewkes in Italy.; Editing by Greg Mahlich and Louise Heavens)

((edward.taylor@thomsonreuters.com)(+49 - 69 - 7565 1187))