UPDATE 1-US seeks to speed up review of auto retooling loans

(Recasts to show loans in one, two months)

WASHINGTON Feb 6 (Reuters) - The Obama administration aims to significantly speed review of up to $25 billion in loans for helping automakers and other companies develop electric cars, better hybrids and other more fuel efficient vehicles, Energy Secretary Steven Chu said on Friday.

Chu told reporters in Williamsburg, Virginia, that he hopes to shave several months off the anticipated review of the advanced technology financing. An aide later said money could begin flowing this spring.

The loan program was approved by Congress in September mainly to help struggling U.S. manufacturers General Motors Corp (GM.N), Ford Motor Co (F.N), and Chrysler LLC make cars and trucks that would satisfy sharply higher fuel efficiency standards set to take effect in the next decade.

The Bush administration said at the time that clearing environmental and other bureaucratic hurdles associated with loan review could take up to a year or more. That timeframe drew sharp criticism from auto allies in Congress who encouraged the Energy Department to accelerate the process.

President Barack Obama, running for the White House at the time, said he would speed up the loans if elected.

The agency has received dozens of applications for assistance, including several from the three domestic automakers.

However, it is unclear if those companies would be included in the first round of financing because loan terms specify that recipients be commercially viable, meaning they will be strong enough to repay the money.

GM and Chrysler received a $17.4 billion federal bailout in December and must prove to the government by March 31 that they can survive.

Ford is also struggling and has not sought bailout funds, but its long-term future is not assured with industry sales in a free-fall, a situation automakers blame on recession and the global credit crunch.

GM has two loan applications under review for $8.3 billion. Some of the money would go toward its plug-in Chevrolet Volt. Ford is seeking $5 billion in financing and Chrysler wants $8.5 billion.

Obama has proposed doubling the size of the program to create the infrastructure necessary to support development of better batteries and other technologies for power systems that reduce or eliminate gasoline use and emissions.

(Reporting by Rick Cowan, John Crawley and Ayesha Rascoe; Editing by Bernard Orr)

(john.crawley@thomsonreuters.com +1 202 898 8340)