UPDATE 1-Top emitters advance on climate finance plan

* Mexican plan for raising climate cash gains backing

* Top emitters stop short of saying how much needed

PARIS, May 26 - The world's top greenhouse gas emitters made progress on Tuesday towards agreeing a Mexican plan that would raise billions of dollars to fund the fight against climate change, France said.

"It's without doubt the most important advance," French Environment Minister Jean-Louis Borloo said of the finance plan after two days of talks among 17 top emitters including China, the United States and the European Union in Paris.

The meeting did not define overall cash needs. Many studies say that tens of billion of dollars a year will be needed to combat climate change as part of a U.N. deal to fight global warming, due to be agreed in Copenhagen in December.

Borloo said the informal Paris talks also made advances on issues including sharing green technologies with developing nations. But delegates said there was little progress in sharing out the burden of cuts in greenhouse gases among rich and poor, at a time when many nations are struggling with recession.

"There is a feeling that we should be able to reach an agreement" on financing, Borloo said, referring to talks among the Major Economies Forum (MEF) whose members account for 80 percent of world greenhouse gas emissions.

The Mexican proposal would oblige all countries to provide cash to fight climate change based on their past and current emissions of greenhouse gases -- mainly from burning fossil fuels -- and the size of their gross domestic product.

That would mean that biggest emitters since the Industrial Revolution, such as the United States and Europe, would pay most. By contrast, the poorest nations in Africa, whose emissions are near zero, would receive large net funds.

"This is the breakthrough for the Mexican plan," French climate ambassador Brice Lalonde told Reuters.

The cash would be part of a wider plan to help avert the projected impact of droughts, heatwaves, extinctions of species, disease and rising sea levels.

MEXICAN MEETING

A third and final preparatory round of the MEF is due to be held in Mexico on June 22-23 before a summit in Italy in July. U.S. President Barack Obama called the talks to try to contribute to a new U.N. deal.

African nations, in a submission to the United Nations last month, said developing nations as a group would need $267 billion a year by 2020 to fight global warming.

A European Commission document in January quoted experts' estimates of a need for net global incremental investments of 175 billion euros ($245 billion) by 2020 to help curb world emissions.

It also noted that a U.N. report estimated that separate costs of helping developing nations adapt to the impact of climate change -- ranging from drought-resistant crops to flood barriers -- would be 23 to 54 billion euros a year by 2030.

Earlier, Germany had said there was scant progress at the talks. "Everybody is coming here wanting progress but in the discussions we heard the old statements," Environment Minister Sigmar Gabriel told Reuters. "There was not enough progress."

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