UPDATE 1-Verbund's capital hike hit by government tussle-paper

(Adds comment by Economy Ministry)

VIENNA, July 20 (Reuters) - Austrian utility Verbund's (VERB.VI) plan for a capital raising of around 1 billion euros ($1.3 billion) could be delayed because of a government disagreement over whether to take part, a newspaper said on Tuesday.

Austria's economy ministry said it hoped to find a solution before a government meeting next month.

Verbund, which is 51-percent owned by the Austrian state, said last month the government backed the planned capital increase and would participate in the issue with around 500 million euros, corresponding to its share in the company.

However, daily Der Standard reported that the Social Democrats, partner in Austria's coalition government, were trying to block the state's participation.

"We hope to have a solution by Aug. 24," a spokeswoman for the economy ministry told Reuters. "Some other shareholders have demands which we need to consider."

The Social Democrats want similar capital-boosting measures at other companies in which the state owns stakes, such as energy group OMV (OMVV.VI) and Austrian railway OeBB, Der Standard said.

The capital increase would be used to bring down Verbund's debt, which grew last year after a 2 billion-euro spending spree. [ID:nLDE65T04H]

The Social Democrats and conservatives have ruled together since 2008 in a mostly stable broad-based coalition. ($1=.7706 euros) (Reporting by Sylvia Westall; Editing by Greg Mahlich)