By Lesley Wroughton

SINGAPORE, Sept 13 (Reuters) - A politically contentious plan to revamp the 61-year-old International Monetary Fund and give rising economic powers more say will be hotly debated when world financial leaders gather in Singapore this week and next.

The meetings are one of the rare times when finance chiefs from both rich and poor countries can discuss the state of the world economy. The IMF says economic risks have risen given increased inflationary pressures, high oil prices and a slowing U.S. economy.

The talks are being held under tight security in the tropical city-state, a staunch U.S. ally and a major base for many Western businesses that sees itself as a prime terrorism target.

At issue is how to distribute the voting power of the IMF's 184-member countries to recognize a shifting order in which emerging economies are more influential. China now has the world's fourth-largest economy.

The changes would help boost the IMF's legitimacy in developing countries' eyes after it was criticised for its handling of the 1997/98 Asian financial crisis.

Member countries will vote in Singapore to overhaul the fund's arcane voting structures, starting with a one-off rise in the voting power of China, Mexico, South Korea and Turkey.

A second, more controversial phase, will seek further adjustments of voting rights based on a new formula and increases in so-called basic votes to benefit poor countries.

But large emerging economies such as Brazil, Argentina and India have objected, unconvinced the reforms go far enough.

The European Union has backed the plan but demanded it be treated equally in any radical revamp, while the United States has said it wants to maintain its dominant voting power.

Finance chiefs will also pore over proposals to increase the IMF's watchdog role over a more integrated global economy, where the potential is now even greater for financial crises to spill across borders.

One of the biggest -- and thorniest -- issues will be how to boost the IMF's surveillance of exchange rate policies of emerging economies such as China. The United States wants China to increase the flexibility of its currency as China has built up a massive trade surplus.

With the IMF forecasting a slowdown in the U.S. economy and warning it could cool more rapidly if the country's housing market slumps, pressure on China to loosen its hold on the yuan currency is likely to loom large at the Singapore meetings.

WIDENING IMBALANCES Adding to tensions is a widening global economic imbalance, which the IMF has warned could unwind quickly and chaotically and could lead to a slide in the U.S. dollar if not addressed through coordinated policies.

The IMF has offered to broker a solution to the imbalance problem in talks with the United States, Japan, China, the euro area and Saudi Arabia.

Rebalancing the global economy took on more urgency this week as the U.S. trade deficit widened to a new record in July and policy makers said faltering global trade talks will increase protectionism.

IMF Managing Director Rodrigo Rato has said the IMF will forecast growth in 2006 of around 5 percent in its World Economic Outlook expected to be released at 0200 GMT on Thursday.

Nearly 23,700 delegates are estimated to decend on Singapore, a financial and shipping centre.

Singapore is banking on the meetings to draw attention to its development and Asia's growth, which the IMF has said has been ''nothing short of dazzling''.

Roads near the conference area have been sealed off and traffic diverted, with more than 10,000 police officers and soldiers maintaining around-the-clock security checks.

Disputes over the government's decision to bar big protests at the meeting have also cast a spotlight on Singapore's political restrictions and curbs on freedom of expression. The government says it must ensure security for delegates and the public.

Public protests are rare in Singapore, which requires a police permit for all outdoor demonstrations and any gathering of more than four people.

REUTERS SRS DS1520