UPDATE 1-Polish watchdog clears way for IPO of insurer PZU

WARSAW, April 13 (Reuters) - Polish market regulator KNF paved the way on Tuesday for the roughly $3.4 billion flotation of the country's top insurer, PZU, expected to be Warsaw's largest initial public offer this year.

KNF approved a prospectus for the sale of up to 30 percent of PZU, which analysts estimate could raise as much as $3.4 billion.

Most of the proceeds will end up in the pockets of Dutch insurer Eureko, as part of last year's deal to settle a long-running dispute with Poland, which will retain control of PZU.

KNF said in a statement the prospectus would be published on Friday.

Last week, state-controlled insurer PZU announced plans for PZU's flotation of as much as 30 percent of the company, which analysts estimate could raise up to $3.4 billion.

Sources told Reuters last week the group would launch the bookbuilding process in mid-April with a market debut in early May.

Earlier on Tuesday, a treasury ministry spokesman said Poland was determined not to delay its ambitious $9 billion privatisation plans despite the turmoil following the recent plane disaster that claimed the live of the country's president and other top officials.

Poland has already raised more than a fifth of the expected 25 billion zlotys ($9 billion) from the sale of state assets.

In November, Poland raised 6 billion zlotys from the flotation of energy group PGE, Europe's largest IPO last year.

(Reporting by Chris Borowski; editing by Simon Jessop) Keywords: PZU IPO/ ([e-mail]; [phone]; Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.