BUCHAREST, Nov 6 (Reuters) - The International Monetary Fund has put off a review of Romania's 20 billion euro rescue package until it forms a new government and will delay badly needed aid originally slated for next month, officials said on Friday.

Romania's main economic mentor has told Bucharest it must pass laws including a cost-cutting budget by Dec. 10 or risk postponement of a 1.5 billion aid tranche, crucial to the EU member's bid to shore up finances and avert deeper recession.

Analysts say political deadlock since the collapse of a centrist government last month and wrangling between rival parties ahead of a two-stage presidential election mean policymakers will probably miss the deadline.

The ballot -- a Nov. 22 first round and a likely Dec. 6 runoff -- is one of Romania's most important votes since the 1989 fall of communism, as the victor will pick the head of the next two governments and influence long-delayed reforms.

IMF head of mission to Bucharest Jeffery Franks said the Washington-based lender had suspended its review of the package until a new cabinet was formed, which political pundits do not see happening until after a runoff.

"We feel we can rapidly conclude our review of the economic situation... once the political situation is resolved," he said.

"The international community will continue to support Romania ... but ultimately it depends upon Romanians to solve Romania's problems with our support."

He also said Romania had missed a range of targets agreed with international lenders, and that the public sector deficit could reach 7.8 percent of gross domestic product this year, above the agreed 7.3 percent goal.

Central bank Governor Mugur Isarescu, when asked whether he expected the next loan tranche to be delayed, said:

"Yes, things appear obvious now."


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Financial markets have responded by demanding higher interest on Romanian debt and pushing credit default swaps higher since the crisis started six weeks ago. It now costs $85, 000 more to insure $10 million of bonds against default.

Romanian CDS prices were down to 280.6 from 281.1 on Thursday's close and the leu currency was little changed on Friday after the comments, although analysts said they suspected the central bank of propping it up with covert intervention.

Analysts say the IMF's warning means Bucharest will not meet its demands ahead of a Dec. 10 Fund board meeting and it will get the next loan tranche in January at the earliest.

Even a brief postponement can potentially push Bucharest into costly domestic borrowing to make up for the shortfall.

It can also halt badly needed infrastructure investment and other projects that are crucial to avoid deepening economic contraction estimated at 8-8.5 percent this year.

"This is nothing good for Romania," said political analyst Mircea Marian. "The political crisis will continue indefinitely, probably until mid December."

Basescu named ally Democrat-Liberal Party senior, Bucharest district Mayor Liviu Negoita as new prime minister designate.

Negoita pledged to come with a proposed coalition on Monday. But he is expected to fail to win favour in the opposition-dominated parliament, which rejected Basescu's previous nominee, party ally Lucian Croitoru, on Wednesday.

The Fund had originally planned to end its mission on Nov. 9 but moved up its closing news conference to 1200 GMT on Friday.