* U.S. prosecutors oppose bail, say Stanford might flee

* Stanford lawyer says client is not a flight risk

* Investor money used for Stanford's lavish life--gov't (Updates that judge delays bail ruling until Tuesday)

By Anna Driver and Eileen O'Grady

HOUSTON, June 29 (Reuters) - Allen Stanford will spend Monday night in jail after U.S. prosecutors told a federal judge that the accused swindler would likely flee the country rather than face life in prison if released on bail.

U.S. Magistrate Judge Frances Stacy last week said that Stanford, who faces criminal charges for a $7 billion Ponzi scheme, may leave federal custody, provided he comes up with a $500,0000 bond -- including $100,000 in cash -- and lives with his girlfriend in a Houston high-rise apartment.

But Stanford remains in custody after the U.S. Justice Department opposed bail of any sort and sought to keep him in jail until his trial, now set for August. Stanford, 59, faces life in prison if convicted of all 21 criminal charges.

Now U.S. District Judge David Hittner, who will preside over the upcoming criminal trial, must decide whether Stanford can walk free until his trial begins.

At a hearing on Monday, Hittner said he would decide on the government's motion to revoke Stanford's bond on Tuesday afternoon at the earliest.